Performance Packages
Founders unlock their stake as they grow the business, not just as time passes
At a typical company, founders and employees get stock on a 1-year cliff, 4-year vest.
MetaDAO works differently. We borrow a concept from public markets: performance packages. The basic premise is that entrepreneurs unlock their stake as they grow the business, rather than just time passing.
Performance packages can be set up in a variety of ways. Tesla, for example, gave Elon Musk a performance package where he earned TSLA as the value of TSLA grew:
In their case, the package was based on market capitalization and operational milestones like revenue and EBITDA. In our case, packages are based only on value per token and time passing.
The default performance package is as follows:
- 5 tranches, with equal amounts of tokens in each. For example, if the whole performance package is 10,000,000 tokens, each tranche would contain 2,000,000 tokens.
- 18 month cliff for all tranches.
- Tranches run in 2x multiples over the fundraise price. For example, if an entrepreneur raises at a $1M valuation then absent dilution they would unlock their first tranche at $2M, their next one at $4M, and thus forth with $8M, $16M, and $32M.
- To determine the value, we use a 3-month TWAP (time-weighted average price). So the soonest a founder can unlock tokens in the standard setup is 21 months post-raise.