Founders are recommended to purchase (for a nominal amount) common shares in OCV companies (as opposed to receiving options). This is, however, dependent on each founder’s personal tax situation - please consult with tax advisors.
When a company issues common stock, it sells ownership stakes in the company differently than it would to investors - the price of purchasing common stock is nominal for the company’s founders but may change over time with employees (see 409A Valuation).
The wiring of funds to execute the share purchase agreement needs to be completed prior to OCV SAFE funding.
It is strongly advised for founders to seek tax counsel from professionals who are experts in working with founder equity in venture-backed startups.
See additional details under Global Workforce Considerations: immigration if work visa transfers are required.
Common shares are usually reserved for founders, employees, and other stakeholders.
Options give the holder the right to buy common stock at a specified price for a certain period of time and may be used as a form of compensation for employees and advisors. Though options are a right to buy common stock, they are not the same as actual shares of stock.
See also (Stock Options).
The following guidelines are:
Vesting Period: Four years (48 months), no cliff