freeze event

Trigger Condition

Unplanned exits or internal deadlocks among principal decision-makers necessitate the temporary suspension of contribution tracking. When a cofounder ceases active work but disagrees on terms, the board triggers a freeze event to prevent them from earning more shares. This action pauses the dynamic equity calculations, ensuring that equity does not accrue to non-performing members.

Equity Resolution

Structured negotiations during the pause seek to establish a fair valuation for the departing partner’s accumulated contributions. During a freeze event, the ledger is evaluated to calculate the exact share of equity earned up to the freeze date. This evaluation helps determine whether the shares should be purchased back or retained under a modified vesting schedule.

The process ensures that the remaining team can plan the redistribution of the remaining equity pool.

Operational Resumption

Resolving the core conflict allows the business to lift the pause and resume normal equity tracking. Once the departure is finalized, the freeze event is formally terminated. The business can then recruit replacement talent using the freed equity.