Startup Employment & Workers Glossary
An accelerator is a program that mentors and accelerates the growth and success of a startup. Prepare to give away single-digit chunks of equity to develop your business. Accelerators include: Y Combinator, TechStars, 500 Startups.
An individual whose job it is to control the operation and affairs of a business or institution.
A group of people who have been chosen to help a business. They form a board and help manage, but they do not have the authority to vote on corporate matters.
An individual who analyses figures or data for companies. It can be a financial analyst, accounting analyst, marketing analyst…(etc.) His or her analysis is used to assist with making decisions in many areas.
A contract in which the employee can be dismissed for any reason and at anytime. Similarly, the employee has the right to leave the company without reason or warning.
Board Of Directors:
A group that governs a company. It is a group of people who are elected by a business’s shareholders. They meet periodically to oversee the business management and ultimately represent the interests of the shareholders. The board has the authority to make decisions but usually confines itself to the issuance of shares, dividends, naming members to various committees, adopting bylaws, hiring or firing senior management, and setting the overall direction for the business.
Chief Executive Officer (CEO):
The highest-ranking executive in a company. A CEO has a lot of responsibilities and makes all the important decisions for the companies.
Included in employment contracts by financial firms, a clawback is a contractual clause. This clause refers to the fact that the money already paid must be paid back under certain conditions.
It is difficult to set up a startup alone. A Co-founder helps you develop your startup. To be a co-founder you either sign a co-founder agreement or obtain the directors, shareholders or investors permission. According to the type of startup, the co-founder may be an entrepreneur, engineer, VC firm, web developer or web designer… (etc).
Is a single member of the board of directors for a company. He or she is elected by the shareholders. The director usually represents the shareholders, has many duties, exercises control and manages the company with the other members of the board.
Employee Stock Option Plan:
An amount of the startup stocks reserved for employees. Employees can buy a fixed number of shares at a determined price. This plan can be used to motivate employees to work hard or to attract new hires.
A contract between the employee and the company. This contract specifies all the terms such as the responsibilities of the employee and his or her salary.
Entrepreneur In Residence (EIR):
This entrepreneur is employed by a Venture Capital Firm in order to help the firm. The employment is temporary.
The person who sets up the company. Usually he or she has a majority of the shares in the company. However, the ownership percentage of the founder usually decreases as new investors get involved in the company.
This is a financial incentive to encourage key employees to stay with a company. They help increase employee retention rates and are common in industries where highly-compensated employees are likely to move from company to company.
A huge amount of money given to employees (usually upper executives) as a compensation when their employment is terminated. Golden Parachute is due often after a change of control such as a merger or takeover. The Golden Parachute includes stock options or cash bonus.
Employees who have major ownership and/or decision-making roles in the business. Key employees are usually highly compensated and may receive special benefits as an incentive both to join the company and to stay with the company.
Key Person Clause:
This clause ensures that a key individual in a business devotes enough time to the partnership. If a key person doesn’t devote this specified amount of time to the partnership, the management of the funds is not allowed to make any further investment.
An individual with specialised skills in an area who gives advice to entrepreneurs in the management and development of their startups.
Prohibition for an employee to solicit the company’s clients or employees for his or her own benefit or the benefit of a competitor once he or she leaves the company. This prohibition is embodied in a non-solicitation agreement or in an employment contract.
An agreement concluded by an employee and the management in which the employee commits to not working for competitors during a limited period once his or her contract of employment is terminated.
Refers to common stocks reserved for employees. Employees can receive common stock in the company instead of a cash bonus in reward for their great work. This process allows a company to attract a talented workforce.
The team of a startup is crucial. It refers to all the people who operate in the company (web developer, marketing, paralegal…).They can be paid by salary or equity.
A vesting schedule is set up by a company to determine when you’ll be fully vested, or acquire full ownership, of certain assets.