The Startup Magazine

MAY 13, 2022

Equity distribution among co-founders may be a complex procedure while starting any business. How you split founder startup equity can be even harder for a tech startup due to different roles and contributions from the founders. You can utilize a co founder equity calculator to properly divide equity amongst co-founders. .

Equity 172

Equity Founder Vesting Cofounder 172

Startup Professionals Musings

AUGUST 4, 2014

The first question I usually get is what percent of the company or equity is that person worth? Just because it was your idea doesn’t mean you “deserve” 90 percent of the equity. The value in a startup is all about tangible results, so there is no equity value in the idea alone. Amount of venture funding provided.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

Startup Professionals Musings

MAY 22, 2020

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots? Look for examples of similar companies and revenue multiples achieved from acquirers.

Technical Review 436

Technical Review Due Diligence Sweat Equity Burn Rate 436

The Next Web

JUNE 15, 2012

From Silicon Valley to Peoria, Illinois, cash-strapped startups look for inventive way to finance their business – often handing out equity to employees, consultants, vendors, and other service providers. Pitfalls in sharing equity. While equity can be a great tool for compensating early on, the drawbacks are significant.

Equity 116

Equity Stock Options Vesting Stock 116

Startup Professionals Musings

AUGUST 24, 2016

So the first question I usually get is what percent of the company or equity is that person worth? Just because it was your idea doesn’t mean you “deserve” 90% of the equity. The value in a startup is all about tangible results, so I see no equity value in the idea alone. Amount of venture funding provided.

Equity 120

Equity Cofounder Technical Cofounder Intellectual Property 120

Eric Friedman

NOVEMBER 18, 2022

I have been thinking about early stage equity and advisor grants for some time, including a post in 2016 , that I rely on and wanted to revisit. I have had a few founder friends reach out to me asking about how much equity to give to an advisor, and had some operators reach out asking how to become an advisor for an early stage founder.

Early Stage 103

Early Stage Equity Vesting Cap Table 103

The Next Web

NOVEMBER 20, 2013

There are a lot of variables to go into calculating a fair equity split a startup team. Understand that not all of this will be granted day one, with everyone having higher stakes in the short run, but you will have an equity cushion to play with as the employee base scales. How do you manage your equity split in your company?

Cofounder 136

Cofounder Equity Founder Seed Stage 136

Feld Thoughts

SEPTEMBER 2, 2011

The founders each have common shares that will vest over four years. The vesting schedule protects each of the co-founders in case one gets hit by a bus or decides to drop the project after a short period of time. Equity is split 55% and 45%, but where is that officially recorded? Time to update the cap table.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

techcrunch.com

JUNE 22, 2012

Free Startup Docs: How Much Equity Should Advisors Get? Entrepreneurs want to compensate their mentors and advisors for the time they dedicate to helping their businesses grow, but they have no idea how much equity to offer. In particular, Ressi said, the team is interested in reactions to the above equity matrix. Headphones.

Equity 94

Equity San Francisco Startup Silicon Valley 94

The Startup Toolkit

FEBRUARY 15, 2013

false As a cheatsheet, the “normal” equity structure is: Founder terms: 4 year vesting, 1 year cliff, for everyone, including you. 2.0% ) : 4 year vesting, optional cliff, full acceleration on exit. Getting equity structures right. Cliffs & vesting. Vesting is how we fix that. Advisor terms ( 0.5–2.0%

Vesting 56

Vesting Equity Cofounder Technical Review 56

The Next Web

OCTOBER 7, 2013

Quite frankly, waiting provides more assurance around employment risk without the commensurate sacrifice in equity comp. It is typical for employees to vest their options over four years with a one year cliff, which means a new hire must stay on the company for at least one year to see any shares. How do you feel about that number?

Engineer 129

Engineer Dilution Option Pool Vesting 129

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders. Equity for Employees. Bookkeeper.

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Equity Employee Founder CTO Hire 62

www.avc.com

SEPTEMBER 22, 2011

Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. And the amount of equity you need to grant to accomplish these hires is also an art and most certainly not a science.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Both Sides of the Table

SEPTEMBER 29, 2013

But as with many people who have a vested interest in fast rounds being assembled, they don’t quite get why it is so important that VCs actually take their time. Both are right. Jason, Kevin and Dave can move an order-of-magnitude faster than VCs and sometimes this is a good thing for entrepreneurs. founder fighting.

Syndication 356

Syndication Syndicate Cofounder Early Stage 356

Startup Professionals Musings

FEBRUARY 18, 2023

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots? Look for examples of similar companies and revenue multiples achieved from acquirers.

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

VC Adventure

AUGUST 16, 2020

Both of those things are not good for your business, so while it’s ok to offer some level of cash/equity trade-off, it shouldn’t be over-done. My background thesis inherent in this is that employees with options should continue to vest new option as they continue to work for your business.

Programming 148

Programming Vesting Equity Software Review 148

ReadWriteStart

MAY 3, 2012

Offer Equity Compensation to Team Members: Generate interest in joining your team by giving equity to others with complementary skill sets to yours. With a four-year vesting schedule and a six-month “cliff” or trial period, you can get others to join in on the fun of startup, and make progress without expending cash.

Bootstrapping 137

Bootstrapping Software Review Startup Equity 137

Up and Running

DECEMBER 1, 2015

Of course, not every equity compensation story is a David Choe Story. If you’re thinking about extending equity to an employee or a vendor (as in the example above), you should know that the topic is multi-faceted. In this article, I’m going to examine: What equity compensation is. Different types of equity compensation.

Equity 60

Equity Employee Stock Options Vesting 60

Both Sides of the Table

MAY 5, 2011

It’s clear that America has a vested interest in promoting entrepreneurship in many regions in the country to stimulate innovation & job creation. Who will step up the way that Steve Case (founder of AOL) has done with Startup America to promote this initiative to politicians, business leaders and the press. We know it can be done.

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Seattle Silicon Valley Technical Review Los Angeles 317

View from Seed

DECEMBER 4, 2014

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly. Sometimes co-founders put off the equity split question for some time.

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Equity Founder Sweat Equity Cofounder 315

Scott Edward Walker

FEBRUARY 1, 2014

Mistake #3 : not setting-up vesting schedules (at 17:19). Mistake #3: Not Setting-Up Vesting Schedules. Vesting schedules must be established to protect the other co-founders (plus, VC’s will typically require them). Typical vesting schedule: four years on a monthly basis. Up-front vesting possible.

Software Review 111

Software Review Delaware Accredited Investor Due Diligence 111

Scott Edward Walker

FEBRUARY 1, 2014

If you would like to jump to different sections of the video, here’s how it breaks down: Mistake #1: forming the wrong entity (at 1:25) Mistake #2: not buttoning-down IP ownership issues (at 10:20) Mistake #3: not setting-up vesting schedules (at 17:19) Mistake #4: not complying with applicable securities laws (at 29:21) Mistake #5: not doing (..)

Software Review 111

Software Review Delaware Accredited Investor Due Diligence 111

Gust

DECEMBER 1, 2011

Notice what is missing from this list of priorities: The company itself – that is, a business entity, most often a corporation , that will own the entire business (however defined), issue equity to founders, take investment capital , enter into contracts, make sales, pay employees and contractors, and so forth.

IP 114

IP Intellectual Property Equity Liquidity Event 114

YoungUpstarts

AUGUST 19, 2019

For equity trading, the general rule of thumb is to start an investment portfolio of at least $1000. Everyone gets to learn something new and shares a mutually-vested interest in success. Low $$ Barrier to Entry. However, the issue for many people starting out in their careers is that $1000 might not be feasible.

Investment Bankers 147

Investment Bankers Technical Review Stock Vesting 147

www.inc.com

SEPTEMBER 24, 2011

Should You Share Equity with Consultants? To grow his cash-strapped start-up, Parker ended up sharing equity -- not only with employees, but also with consultants and vendors. Parker found that equity as compensation helped build loyalty to his company -- even among consultants. But sharing equity can have pitfalls, too.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Agile VC

DECEMBER 4, 2014

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

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Cofounder Equity Founder Sweat Equity 255

ConversionXL

NOVEMBER 6, 2019

Vested Technology spent $17k on their MVP. Vested Technology is a recruiting-automation platform that works alongside teams to identify, engage, and hire passive candidates. Prior to his role at Vested Technology, co-founder and CEO Akash Srivastava worked on Wall Street. He spent $17k to launch Vested Technology’s MVP.

Sweat Equity 78

Sweat Equity Software Review Vesting Cofounder 78

Startup Professionals Musings

APRIL 10, 2016

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots? Look for examples of similar companies and revenue multiples achieved from acquirers.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

APRIL 8, 2015

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots? Look for examples of similar companies and revenue multiples achieved from acquirers.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Steve Blank

MAY 19, 2015

retaining their existing hires who were working for intern-like salaries with little equity. When we did, I asked him about his head of HR, and heard all about what great medical and insurance benefits, stock vesting, automated expense account forms, movie night, company picnics, etc., Upgrade their salaries and equity ASAP.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

www.mattbartus.com

SEPTEMBER 24, 2011

Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” The most you lose is 1 or 2 months of vesting on the stock. Blog blog archive. Quora Answers.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Startup Professionals Musings

JULY 24, 2011

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t accept an offer which promises to “work out the equity terms later.” Advisory Board Member, 1% Senior Engineer,3 -.7%

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Equity Stock Options Advisory Board Stock 234

Austin Startup

DECEMBER 9, 2019

Another red flag is when a SIC member asks for equity in your company upfront, without any performance vesting standards. For example, “give me 5% equity in your company and I’ll give you advice and allow you to use my face on your slide deck to raise money.” This is a bad deal for you, if you take it.

Vesting 72

Vesting Early Stage Seed Capital Equity 72

Startup Professionals Musings

SEPTEMBER 25, 2019

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.” Advisory Board Member, 1% Senior Engineer,3 -.7%

Equity 237

Equity Stock Options Advisory Board Stock 237

Both Sides of the Table

MAY 9, 2011

Give them a large sum of equity. Vested over 4 years. If you do decide to go down the 50/50 route, please at least consider: Make sure you have founder vesting for both of you. It is not uncommon to see startup founders walk before raising capital and take large pieces of equity with no vesting.

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Cofounder Founder Vesting Founder Vesting 393

Software By Rob

NOVEMBER 16, 2009

This morning Seth Godin published a post titled Debt, equity and a third thing that might work better. Not only are you getting financing with little risk, but with customer financing you have someone in the industry with a vested interest in your product succeeding.

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Equity Software Review RSS Widget 42

NZ Entrepreneur

SEPTEMBER 29, 2021

Remuneration will reflect the stage of the startup but it’s generally at a rate of about $500-1000 a meeting or directors might be paid in equity at about 0.5-0.75% This equity will vest over 2-3 years. 0.75% for directors and 1-2% for the chair.

Technical Review 104

Technical Review Software Review New Zealand Due Diligence 104