S.

Muhammad Ali Bilgrami

20201-27646

Question
What factors should employees consider when navigating the lock-in period for vested equity in a
startup, and how does this impact their decision-making regarding their long-term commitment to the
company?

The lock-in-period for vested equity is a crucial aspect in the entrepreneurial spectrum. Employees
should consider a lot of factors before making any decision.

The vision and culture should align with the employees’ interest in order to ensure long term
commitment. This in turn will also reflect on the productivity of the business and as well as the financial
reward and success which the employees aim to achieve.

The legalities of the vested equity concept also contain intricate details and should be considered by the
employees. The duration of the lock in period can be a curse as well if things go other way round. When
any individual is involved in monetary terms with an entity, their approach and decisions change and are
a lot more critical, also thinking about the long term.

Another crucial aspect is the discrepancies in the risk appetite of individuals. Employees should assess
their risk tolerance and also incorporate the fact that startups carry relatively higher risks than
conventional and established businesses.