Why it matters
You started the company three years ago. Under a standard 4-year vest, you are 75% vested. A reset clause says: "At closing, your vesting starts over." You now own 0% on day one of the new round, even though you've been building this for years. This isn't alignment — it's leverage. If the relationship sours and you leave or are forced out in year one, you walk away with almost nothing despite years of work.
How to negotiate
Refuse outright on already-vested shares. Accept re-vesting only on the unvested portion if at all. Negotiate single-trigger acceleration on termination without cause and double-trigger acceleration on change of control. If they push hard on the reset, that tells you they expect to control the cap table outcome of a transition.
Example language
How this clause typically appears in a term sheet. Read it carefully — predatory language is often buried in routine paragraphs.
Upon the Closing, the founders' previously-vested shares shall be subject to vesting over a four-year period commencing on the Closing Date, with one year of cliff vesting.
TURNSHEET provides intelligence, not legal advice. This page describes typical market behaviour and common negotiation tactics; your specific deal may have nuances that change the analysis. Always review your term sheet with qualified legal counsel before signing.