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Global Strategy: Core Concepts
Founder Equity Splits
The critical process of dividing ownership stakes among co-founders in a startup, impacting motivation, control, and future fundraising. ✨
Article Points:
1
Fair equity splits are crucial for founder motivation, attracting talent, and preventing future disputes.
2
The 'equal split' is simple but often unrealistic; contribution-based splits are more equitable.
3
Key factors for contribution include ideas/IP, time commitment, capital invested, experience, and future responsibilities.
4
Vesting (earning equity over time, typically 3-4 years with a 1-year cliff) is indispensable to protect the company.
5
Early and transparent discussion, focusing on future value, is vital for a healthy split.
6
A formal Founders' Agreement is essential to document the split and vesting terms.
Source:
Founder Equity Splits
Founder Equity Splits
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Source:
Founder Equity Splits
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