Equity investors (PEGs) might sometimes require that all or a portion of the stock owned by Founders and Key employees vest only in stages after continued employment with the company. From the employee standpoint, this is especially sticky. A capricious Founder might "86" a key employee before they are vested.
If you're on the receiving end of that kind of deal, it pushes the importance of an employment contract way up.
As an investor or Founder, you can't have that rattling around in the back of the head of a truly "key" employee. Early stage ventures are difficult. Private ventures are difficult...period. You need full commitment, without reservation, of the people that are working with you to build your venture. They can't be wondering if they're going to get cut before they get to realize the fruit of their labors.
