VC contract terms get tougher on founder shares after governance lapses
Published on: June 12, 2026, 6 a.m. | Source: The Economic Times
Venture capital firms are tightening founder contracts, with nearly 76% of Indian startups now allowing the forfeiture of vested shares for misconduct. This "Nuclear Option" aims to deter financial irregularities and governance issues, a trend amplified by recent high-profile startup disputes. Founders are now negotiating for stricter definitions of "cause" and fair value for any clawed-back shares.
