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How to split startup equity between startup founders when starting a new business

The Startup Magazine

Typically, option holders elect to defer conversion until a departure occurs. However, the difference between the market and strike prices at the moment of conversion is likely taxable income. For the time being, it is critical to realize that vesting enables you to establish how individuals get their shares over time.

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Early Stage Advisor Equity Grants

Eric Friedman

An underutilized action by founders is canceling their vesting due to lack of interaction or help with your company. Like all things, waiting to have the hard conversation is never a great idea. These are easy conversations for a founder as they hopefully are surrounded by people that want to help. Some are not.

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Equity-Only CTO and Equity-Only Developers

SoCal CTO

For some reason there’s a stigma around cash vs. equity conversation and it seems to offend some founders that people have limits for what they will do on an equity-only basis. I would think that if you are trying to attract people on an equity-only basis you wouldn’t want to get too far into the conversation without raising the issue.

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3 Frameworks To Help Prioritize & Conduct Your Conversion Testing

ConversionXL

G o for at least 250 conversions per variation. It’ll be more accurate if it’s 350-400 conversions per variation. And if you want to segment results, you need thousands of conversions per variation in order to have 350+ conversions per variation within a segment.” Don’t convert very well.

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Rethinking Founder Vesting

K9 Ventures

One of these norms is how founder vesting and employee vesting works. I won’t get into employee vesting today as that has much more to consider than I have time to cover in this short post today. Here is a good summary post from Cooley GO on Founder Vesting. The first is fairly obvious.

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Options about your Options – How to think through your company’s option program

VC Adventure

This will also force good conversations about outliers and, in my experience, tends to be a deterrent to title inflation, which I hate. 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. I think this is both practical and fair.

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Watch out for the most common scam in startup world?—?Sputnik ATX

Austin Startup

Another red flag is when a SIC member asks for equity in your company upfront, without any performance vesting standards. Rule Number Two: when giving equity, it should always vest over time for performance tied to measurable goals such as sales or results that move your KPIs. This is a bad deal for you, if you take it.

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