Ad victorem spolias. To the victor go the spoils. Is the same true of founders — should they expect all of the spoils? Probably not.
Other than a sole proprietorship, the sweat and equity required to start a new business demands a lot of players, most of whom will want to be rewarded. The “idea gal” may think she deserves the lions share of equity, but her cofounders and early investors...
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Ad victorem spolias. To the victor go the spoils. Is the same true of founders — should they expect all of the spoils? Probably not.
Other than a sole proprietorship, the sweat and equity required to start a new business demands a lot of players, most of whom will want to be rewarded. The “idea gal” may think she deserves the lions share of equity, but her cofounders and early investors might feel otherwise.
There are no hard and fast rules, but whatever arrangements the investors, founders, and early employees choose, they need to be equitable—regardless of whether they are based on a complex formula or a back-of-the-envelope calculation. And keep in mind that whatever choices you make now, may be affected during later rounds of investment.
Join us and listen to what our panelists have tried and decide whether it might work for you?