What is an anti-flipping clause?
An anti-flipping clause is a contractual provision restricting founders’ ability to sell shares within a defined period after a financing round — typically 12-36 months. The provision combines transfer restrictions, right of first refusal (ROFR), and co-sale rights to ensure founders cannot quickly liquidate their stake after the company is funded, protecting the alignment that the VC paid for at the funding round.
How anti-flipping operates
Three mechanisms typically combine: (1) Transfer restrictions — founders cannot sell shares to anyone without board approval. (2) ROFR (Right of First Refusal) — if the founder receives a bona fide third-party offer, the company and existing investors have first right to match. (3) Co-sale (tag-along) — if a founder does sell, other investors can sell pro rata at the same price.
Lock-up duration
Standard lock-up is 12-24 months post-financing for early-stage rounds; 6-12 months for later rounds with public-market clear path. Some VCs negotiate “rolling” lock-ups that reset with each new financing — founders never effectively cleared to sell while raising. Founders should push for clear release events (acquisition, IPO, after specified period) to avoid indefinite restriction.
Anti-flipping vs. founder vesting
Anti-flipping restricts transferring shares; founder reverse vesting restricts ownership of shares (subject to repurchase if founder departs). The two work together: vesting handles the “founder leaves early” scenario; anti-flipping handles the “founder stays but sells stake” scenario. Both are required for full alignment protection.
Türkiye context
Turkish JV agreements increasingly include anti-flipping mechanisms imported from US/UK templates, especially in deals involving CMB-licensed venture funds. The Turkish Commercial Code (TTK) Article 555 enables share-transfer restrictions in joint stock company articles of association — providing the corporate-law foundation that allows these contractual mechanisms to operate.
Related: Founder Reverse Vesting, Founder Vesting Cliff, Tag-Along, Drag-Along.