How to divide Equity in a startup – StartupOS

The article discusses the considerations and factors involved in determining how much equity should be given to key employees in startups. It emphasizes that the amount of equity granted to employees depends on various factors such as skills, seniority, and timing. Early hires typically receive more equity, while later recruits may receive a smaller percentage. Online guides provide benchmarks for equity distribution based on roles and seniority. The article also advises creating an employee option pool to manage equity distribution more effectively and accommodate future hires. Founders need to negotiate the size of the option pool with venture capitalists and be aware of potential dilution of their shares. The article highlights the importance of vesting schedules and extended exercise periods for stock options. Additionally, equity can be used to attract experienced advisors and outside directors to a startup. Overall, the article suggests that while equity can be a valuable tool for attracting talent, it should be allocated carefully and strategically.

How to divide Equity in a startup By Joe Sweeny