founders' shares

plural noun

, Finance.

1. shares of stock given, at least nominally, for consideration to the organizers or original subscribers of a corporation, sometimes carrying special voting privileges, but likely to receive dividends after other classes of stock.

founders' shares

plural noun

1. shares awarded to the founders of a company and often granting special privileges

Word History and Origins

Origin of founders' shares¹

First recorded in 1885–90

Example Sentences

Although the details of such purchases are not usually public, Thiel's financial assistant later disclosed them in a letter included in the entrepreneur's application for residency in New Zealand: "Mr. Thiel purchased his founders' shares in PayPal through his Roth IRA during PayPal's formation."

From Salon

The filing reveals that Thiel's founders' shares were among those the company sold to employees at "below fair value."

From Salon

Victor Fleischer, a tax law professor at the University of California, Irvine who has written about the valuation of founders' shares, read the PayPal filings at ProPublica's request.

From Salon

At the time Thiel bought his founders' shares, his own hedge fund had already loaned the new startup $100,000, California and SEC records show.

From Salon

Warren Baker, a Seattle tax attorney who specializes in IRAs, said he would advise clients who are top executives working at a startup not to purchase founders' shares with a Roth to avoid accusations by the IRS that they got a special deal and undervalued the shares.

From Salon