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Founder vesting in 2026: what UK start-ups still get wrong.

By Kevin Dougherty, Founder & Managing Partner · 8 min read · 14 March 2026

Reverse-vesting provisions are no longer a “nice to have” for UK-incorporated start-ups raising their first institutional cheque. They are table stakes — and getting them wrong creates real, and surprisingly common, headaches when the term sheet lands.

What reverse vesting actually does

In a typical UK start-up, founders subscribe for ordinary shares on day one at nominal value. Reverse vesting means that, if a founder leaves the business within a defined period, the company (or the other founders) can buy back some or all of those shares — usually at the price originally paid. The shares “vest” over time, so the longer the founder stays, the fewer shares are at risk.

The economic logic is simple: investors are backing the team as much as the product. A founder who walks after six months should not keep a cap-table-defining equity stake that dilutes everyone else for the next decade.

Three clauses VCs now expect as standard

1. A four-year vesting schedule with a one-year cliff. This mirrors US market practice and is now the clear UK norm for Series Seed and Series A. Monthly vesting thereafter is standard; quarterly is increasingly viewed as founder-unfriendly.

2. A clear “good leaver / bad leaver” framework. Bad-leaver triggers should be tightly defined — fraud, gross misconduct, material breach of the service agreement — not the catch-all drafting we still see in templates. Good leavers (death, long-term illness, dismissal without cause) should keep all vested shares at fair value, not nominal.

3. Acceleration on change of control. A single-trigger 100% acceleration is rare; double-trigger acceleration (change of control and termination without cause within 12 months) is now the market position. Expect 50–100% acceleration on the second trigger.

The three mistakes we see most often

Mistake 1: applying vesting from the funding round, not from incorporation. If your company has been trading for two years and you only sign vesting paperwork at Seed, the four-year clock should usually run from founding — otherwise you are effectively re-locking equity the founder has already earned.

Mistake 2: no tax advice on the leaver buy-back price. The difference between “market value” and “subscription price” can be the difference between a clean departure and an HMRC dispute under the employment-related securities rules. Get a tax opinion before you sign.

Mistake 3: silent articles of association. The Shareholders' Agreement may set out the vesting position beautifully, but if the Articles do not contain compulsory transfer provisions aligned with it, enforcement against a departing founder becomes a nightmare. The two documents must speak as one.

What to do before your next round

Pull your cap table, your Articles, and any existing founder subscription letters into one place. If vesting is not already documented, do it before you receive a term sheet — retrofitting vesting under investor pressure rarely produces a founder-friendly outcome. If you would like a 20-minute review of your current position, our corporate team offers this at no cost for pre-Seed and Seed-stage companies.

Skilled Worker salary thresholds: a 2026 update for sponsors.

By Oliver Bennett, Senior Solicitor · 6 min read · 2 February 2026

If your business sponsors overseas workers under the Skilled Worker route, the salary landscape you budgeted for twelve months ago no longer applies. Here is what has changed, what is about to change, and the practical steps every sponsor should take this quarter.

The general threshold

The general salary threshold for a new Skilled Worker application now sits at £38,700 per year, significantly above the pre-2024 figure of £26,200. For most roles, applicants must earn at least this amount or the “going rate” for their specific occupation code — whichever is higher.

There are narrower thresholds for specific categories: new entrants (broadly, those under 26 or within four years of starting in the UK labour market) benefit from a reduced floor, and roles on the Immigration Salary List attract a 20% discount on the going rate, though not below a statutory minimum.

Going rates — the detail that catches sponsors out

Every Standard Occupational Classification (SOC) code has its own going rate, refreshed annually by reference to ONS earnings data. A software developer (SOC 2136) and an IT business analyst (SOC 2135) sit in adjacent categories but attract different going rates, sometimes by several thousand pounds a year. Mis-coding a role on the Certificate of Sponsorship is one of the single most common causes of refusals and licence compliance issues we see.

Going rates are also now pro-rated against a 37.5-hour working week — meaning a role advertised at 40 hours with the “standard” going rate salary is, in Home Office maths, actually underpaying. Sponsors must adjust upward accordingly.

What sponsors should do this quarter

Audit existing Certificates of Sponsorship. If you assigned a CoS between 2023 and early 2024, the salary figure you used may well sit below the current threshold. This is not a problem for existing workers until their extension — but plan the budget for it now, not in the three months before their visa expires.

Rewrite your standard offer letters. Salary figures should be stated as an annual amount, in pounds sterling, and as a pro-rated figure tied to a specified weekly hours commitment. “Competitive” is not a number the Home Office will accept.

Lock down your SOC mapping. Produce an internal matrix of job titles, SOC codes, and current going rates. Review it whenever the government publishes revised occupation codes — which happened most recently in 2024 with the move to SOC 2020.

Check your sponsor licence renewal date. Licences are now valid for 10 years, but the compliance bar keeps rising. A fresh HR audit 6 months before renewal is time well spent.

A word on enforcement

UKVI compliance visits have returned to pre-pandemic frequency, and “cease and desist” licence suspensions for paperwork failures — not just genuine abuse — are meaningfully up. The message from the Home Office is consistent: the route is open to employers who can evidence that they are meeting their duties, and closing fast for those who cannot.

If you would like a confidential review of your sponsor licence position, including a mock compliance visit, our immigration team can usually turn this around inside three weeks.

Leasehold reform: where we are, and what it means for you.

By Amelia Hartley, Partner · 7 min read · 20 January 2026

The Leasehold and Freehold Reform Act 2024 is the most significant piece of leasehold legislation in a generation. But its headlines — “ground rents abolished”, “lease extensions made cheap” — have consistently run ahead of what the Act actually does, and when. This briefing sets out the position in early 2026.

What has already commenced

A targeted set of provisions came into force between late 2024 and 2025. These include:

• The removal of the two-year ownership requirement before a leaseholder can extend their lease or buy the freehold.
• Changes to the right-to-manage regime, including a cap on the landlord's recoverable costs.
• Greater transparency around service charges, with mandatory standardised billing formats now being rolled out.

For flat owners, the single most useful change is the abolition of the two-year rule — you can now start a statutory lease extension the day completion goes through, rather than waiting.

What has not yet commenced

Several of the Act's most-discussed provisions are drafted but await secondary legislation. As at January 2026:

• The new statutory valuation formula for lease extensions — the mechanism that was meant to make extensions significantly cheaper — is not yet in force. Premiums today are still calculated under the pre-Act regime.
• The ground-rent cap to a peppercorn on existing residential leases is not yet in force; ground-rent provisions on new qualifying leases remain governed by the 2022 Act.
• The proposed ban on new leasehold houses has been trailed but not yet enacted.

Practical implications for leaseholders

Should you wait before extending? This is the question we are asked daily. The answer is “it depends” — but for leases with fewer than 80 years remaining, the so-called “marriage value” uplift is a material cost that the new formula is expected to remove. For those leases, waiting may make sense if the leaseholder can tolerate the uncertainty on timing. For leases well above 80 years, waiting adds little.

Service-charge disputes. The new transparency rules strengthen a leaseholder's hand in challenging unreasonable charges. We are already seeing a meaningful uptick in successful First-tier Tribunal applications under the updated regime.

Practical implications for freeholders & landlords

The commercial landscape for ground-rent income is being fundamentally reshaped. Investment pricing of freehold reversions has already repriced significantly, and lenders' treatment of leasehold security is under review. Portfolio landlords should take tax and valuation advice now — well in advance of the remaining provisions commencing.

Timing

The Government has indicated that the remaining major provisions will commence in stages during 2026. There is no single “switch-on” date. We will update clients as each tranche is laid before Parliament; if you would like to be added to our mailing list for these updates, please ask.