Founder-Rollover Equity Board Adviser

The mandate

A sponsor-backed buyer wants two founders to reinvest a significant portion of proceeds and lead the acquired clinical-software platform. Draft terms combine ordinary and sweet equity, a new vesting clock, good- and bad-leaver rules, ratchets and consent rights. Headline ownership percentages do not show dilution under follow-on capital, preference accrual or who controls the timing and form of eventual liquidity.

The adviser will equip independent directors to evaluate whether rollover economics support retention and stewardship without creating an undisclosed transfer from other shareholders. Analysis will follow sources and uses through instrument rights, vesting, dilution, governance and exit waterfalls under multiple operating and financing paths. Advice must distinguish founder employment incentives, reinvestment value and control rights rather than collapse them into one percentage.

Three days per month are reserved for cap-table review, founder-outcome modelling and chair counsel; five transaction or remuneration committee sessions are included over eight months. The adviser will issue concise scenario papers before key term approvals and observe one management explanation session. Requests routed through the chair avoid parallel negotiation with the founders or sponsor deal team.

The adviser has no line or executive authority, does not negotiate employment or equity documents, set remuneration, issue tax or legal advice, value the company officially, communicate an offer or vote on terms. Directors, executives and appointed counsel retain their mandates. The adviser may challenge a scenario omission and request a corrected waterfall but cannot direct the deal team’s commercial position.

The eight-month engagement ends at closing or formal abandonment, whichever occurs first. A single renewal up to two months is available only for a delayed completion and requires committee vote. Any holding, carried-interest participation, sponsor mandate, founder relationship, competing investment, plan-administrator work or remuneration linked to deal completion constitutes a conflict to disclose; the chair determines recusal or termination.

Why the board wants this voice

Rollover equity is often described by ownership percentage even though preferences, dilution and leaver clauses determine realised outcomes. Deal sponsors negotiate value and founders negotiate retention simultaneously. Independent modelling gives directors a neutral view of alignment, downside forfeiture and control asymmetry without intruding on legal drafting or commercial negotiation.

What you will own

• Reconcile consideration, cash proceeds, rollover amount, instrument classes, option cancellation, tax withholding and opening ownership.
• Model liquidation preferences, preferred accrual, conversion, participation, ratchets and distribution order across plausible exit values.
• Test dilution from management pools, acquisitions, rescue funding, ordinary growth capital and down-round protection.
• Compare vesting reset, service credit, performance conditions, good-leaver, intermediate-leaver and bad-leaver outcomes by founder.
• Examine governance consent, information, drag, tag, transfer, call and compulsory-sale rights for practical control asymmetry.
• Separate economics attributable to reinvestment, continued employment, historical ownership and future performance commitments.
• Give directors annotated cap tables, exit waterfalls, sensitivity narratives, unresolved assumptions and decision-ready alignment questions.

Candidate qualifications

• Advised independent directors on founder or management rollover equity in sponsor-backed technology acquisitions.
• Modelled multi-class preferences, sweet equity, vesting, ratchets, leaver provisions and dilution across exit scenarios.
• Distinguished enterprise-value negotiation from employment reward, reinvestment economics and post-close governance rights.
• Challenged cap tables involving option cancellation, tax withholding, follow-on capital and management-pool expansion.
• Explained downside forfeiture and control asymmetry to directors and founders without providing legal or tax advice.
• Maintained independence from sponsors, management teams, plan administrators and transaction-success compensation.

Non-negotiables

• Can attend all five Luxembourg, London, Stockholm or Boston sessions during the eight-month engagement.
• Will disclose equity holdings, carry, sponsor work, founder ties, competing investments and completion-linked remuneration.
• Brings completed founder-rollover modelling with multi-class waterfalls; broad executive compensation advice is insufficient.
• Accepts no authority to negotiate terms, value the business, set pay, interpret documents or communicate an offer.

1. 49 words maximum. Describe rollover terms where headline founder ownership misrepresented likely exit proceeds.
2. 49 words maximum. Which dilution event should an independent board insist appears in the founder waterfall?
3. 49 words maximum. Identify any sponsor, founder, plan or carried-interest relationship relevant to this appointment.