Structuring Co-Founder Vesting Schedules and Intellectual Property Assignment Terms
Vesting schedules release founder shares over elapsed service time, while intellectual property assignments transfer invention ownership directly to the entity.
moonlighting carve out
Meaning
Designated contractual exceptions permit an employee or founder to engage in external business activities that do not interfere with their primary duties. A moonlighting carve out identifies which side projects or consulting roles are exempt from the standard non compete clauses. The provision ensures that intellectual property created in a personal capacity remains with the individual.
Conflict Limitation
Conflict definitions prevent the outside work from harming the company by overlapping in industry or client base. The moonlighting carve out explicitly lists the domains or specific technologies that the founder is allowed to pursue. The clarity prevents legal disputes over the ownership of new ideas.
Asset Security
Security of the company assets is the primary goal of these limitations. A moonlighting carve out usually requires that the individual uses their own equipment and does not use company trade secrets. Work done during business hours remains the property of the employer regardless of the exception.
Performance Requirement
Performance metrics must still be met for the primary role despite the existence of outside interests. The moonlighting carve out often includes a clause stating that the external project cannot consume more than a set number of hours per week. Failure to maintain the core business output can result in the revocation of the permission.
The balance allows founders to keep their creative independence while remaining committed to the venture.