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ArticleBeware the Absentee Landlord of Equity

Beware the Absentee Landlord of Equity

What's the worst equity holder we could possibly have in our cap table? The one who isn't even here any longer.

We all know this, and yet for generations, we've built cap tables loaded with "absentee landlords" who provide no ongoing value but reap all the benefit of those that continue to drive the ship. Until recently the notion of "dead equity" has been just accepted and rarely challenged, leaving those that still work for the company to carry those that don't.

I'd like to poke a giant, trident-sized hole in this argument once and for all. And for my fellow Founders who are dealing with this issue at present, or soon will be, I want to provide you with some ammunition toward what will invariably be a tough and painful conversation.

In Ca...


 
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