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Equity for Early Employees in Early Stage Startups

SoCal CTO

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders are likely not paid for a long time and have a sizeable equity percentage for early risk and having the concept. Same Value for Sweat Equity as Investment Dollars?

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Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

The next reason is to establish a competitive advantage over your competition and quickly acquire a substantial market share. Let’s take an example – In the case of an internet or app business, the user traction and market penetration is a must. Forms of funding. ? Equity investment. Establish a competitive advantage.

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How to Invest in Startups – Indian Edition

The Startup Magazine

Advertising and marketing tech. Here the company looks to grow and strives to create a dominant position in the market. The equity dilution at this nascent stage is on desirable terms; such investing can lead to profitable returns. Indian startups have excelled in various segments and industries. Education tech.

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A VC: Employee Equity: How Much?

www.avc.com

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.

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New Venture Equity As Compensation Is A Long-Term Bet

Startup Professionals Musings

Plus you have to remember that these 200,000 shares could still be worth nothing in four years, depending on the “strike price” today, compared to the market price four years from now. CEO brought in to replace the founder, 5 - 10% CTO, CFO, VP of Marketing or Sales, 1.5 - 3% Chief Engineer or Architect, 1 - 1.5%

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8 Keys To Maximizing Your New Venture Stock Net Worth

Startup Professionals Musings

Even though initial stock has no value or market, it is extremely valuable in dividing entity ownership between multiple co-founders, commensurate with their investment, contribution and role. This is called stock dilution control. Minimize your own loss of ownership as major investors contribute.

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What Do Boards Actually Do?

Both Sides of the Table

Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. This is similar to the role that public markets play in helping shape publicly traded companies.

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