An investor is offering to fund severance for three of my employees
Got an interesting proposition from an investor: they're offering to fund severance for a few of my employees.
Basically, if we run out of runway in 2-3 years and my employees have stuck around, they get guaranteed 3-month severance pay. If my employees leave sometime in the next 2 years, this money comes directly to the company instead.
Employees to exchange 3 months' worth of their stock options to the investor. They seem on board, they get a bit of downside protection and they've got most of their stock options still tied to the company.
Basically, if we run out of runway in 2-3 years and my employees have stuck around, they get guaranteed 3-month severance pay. If my employees leave sometime in the next 2 years, this money comes directly to the company instead.
Employees to exchange 3 months' worth of their stock options to the investor. They seem on board, they get a bit of downside protection and they've got most of their stock options still tied to the company.
Anything I'm missing? Would you do this deal?