Good Leaver
/ɡʊd ˈliːvə/
A good leaver is someone who exits a company under positive or neutral circumstances and retains favourable rights to their shares or equity, rather than forfeiting them or selling them back at a reduced price.
A good leaver is someone who exits a company under positive or neutral circumstances and retains favourable rights to their shares or equity, rather than forfeiting them or selling them back at a reduced price.
Good leaver status typically applies when you leave due to death, serious illness, disability, redundancy, or retirement at the agreed age.
Some agreements also include resignation by mutual consent or termination without cause as good leaver scenarios.
As a good leaver, you generally keep your vested shares and can sell them at fair market value.
You might also retain some unvested shares depending on how your agreement is structured, though this varies significantly between companies.
A bad leaver exits under negative circumstances like dismissal for cause, breach of contract, or resignation without proper notice.
Bad leavers typically forfeit unvested shares and must sell vested shares back at a lower price - often the original purchase price rather than current value.
Yes, good leaver terms are negotiable when you're joining a company or setting up shareholders' agreements.
It's worth discussing which circumstances count as good leaver scenarios and what happens to both vested and unvested shares in each situation.
These clauses protect the company by ensuring departing team members are treated fairly whilst preventing people from leaving with valuable equity that hasn't been earned.
They balance the interests of those who stay and continue building value with those who exit legitimately.
Good leaver provisions become crucial if you're leaving before an exit event like a sale or IPO.
The difference between good and bad leaver treatment can mean keeping or losing shares potentially worth substantial amounts, so understanding your status is essential before making departure decisions.
