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Founder Retention Agreements After a Company Sale

Acquiring, selling or investing in a company requires clarity about the assets acquired and risks assumed. Founders may be asked to continue managing the company after selling ownership interests.

What to keep in mind

Separate sale consideration from compensation, performance goals, service scope, governance and exit conditions.

Mixing the sale price with future employment or management commitments creates avoidable ambiguity.

Distinctions often confused

A founder's continued employment is different from continued share ownership.

Frequently asked questions

Can part of the purchase price depend on future results?
Yes, through carefully drafted contingent-price mechanisms.
What if a founder leaves earlier than planned?
The contract should regulate consequences and lawful remedies.

Informational content. It is not a substitute for professional advice.