What Happens to Startup Equity if a Founder Dies?
Startup equity does not simply “pass to the family.” Shareholder agreements, vesting, buyback rights, and transfer restrictions decide what happens.
Assume nothing until you have read those docs.
Key takeaways
- 01
Review vesting, repurchase rights, ROFR, and transfer limits while everyone is healthy. Waiting until a death is the expensive way to learn the rules.
- 02
Illiquid shares rarely pay household bills. Life insurance or a funded buy-sell can give a spouse cash while ownership questions get sorted out.
- 03
A written buy-sell with insurance behind it reduces fights between co-founders and an estate over who owns what and at what price.
- 04
Stead Life helps with the insurance piece. Your corporate and estate counsel own the equity documents.
In this guide
- Review vesting
- Illiquid shares rarely pay household bills
- A written buy-sell with insurance behind it reduces fights between co-founders and an estate over who owns what and at what price
- Stead Life helps with the insurance piece
Recommended next step
BusinessSee how Stead Life builds this into a lifelong insurance relationship.Continue learning