How To Distribute Startup Equity Fairly for Founders
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- Опубликовано: 30 сен 2024
- Distributing startup equity among founders can be tricky. You want to make sure each startup founder is getting compensation for everything they’re doing. Don't miss this video to learn how to distribute startup equity fairly for founders.
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16 Lessons I Learned Creating a Million Dollar Startup: ruclips.net/video/WFuxff1d_5M/видео.html
Um NO on the geography- equivalent work gets equivalent pay. You don’t penalize a co-founder for choosing a place with a lower cost of living. That’s ridiculous.
Hey Rob what if you bootstrapped as a solo founder to 10k/mmr or 100k/mmr then want to bring in someone else as cofounder. How much equity should you give?
Great question
@@gidd agreed.
imho, when your startup makes 100k/mmr and you bring someone, doesn't he become an investor rather than a co-founder? He may be an investor and works for the start up, then what he gets is like employee + investor equity, right?
@@kingsg4154 How is he an investor? lol.
If I'm non-technical and scale to 100kmrr with an mvp and bring a technical co-founder on board he IS a co-founder
There is a big difference between $10k and $100k MRR.
This depends on a lot of factors, but as a loose rule of thumb if I had a SaaS doing $10k MRR and I brought in a co-founder I’d be looking to give in the 10-20% range (maybe stretch to 25%?) depending on the person, current growth, etc. This is not for an employee, but a co-founder who is an owner-level thinker, is a known-quantity, and gets things done. I would have this equity vest over 3-4 years (and keep in mind, there will be tax implications if they do not pay for this equity - consult your CPA).
At $100k MRR, why bring in a co-founder at all? At that point the business is significantly de-risked. At that point I would hire someone, pay them a great salary and offer a couple % in stock options (1-5% depending on the role, their skillset, what salary you’re paying, etc). At $100k MRR the founding of the business is done, and you are into the growing/scaling phase.
Poorly thought out. You need to scaffold information
Thank you for this very valuable information you put into your videos
My pleasure! Thank you for watching :)
I’d be interested in how you would structure it for employees. Great video!
Right on, we’ll add it to our video idea list.
I really like these videos. Thanks for putting them together.
Glad you like them!
Microconf connect is full but I signed up for the waiting list 😁
Great video, Rob! Also I have been Ecom seller since past 5 years. So just curious if your were in my shoes, would you build a SaaS solution serving Ecom sellers which is a niche that would have 1000s of customers(Ecom sellers) and growing everyday day thanks to the ease of starting an e-commerce business today OR Would you rather build a SaaS solution for masses wherein the potential of the solution (e.g Whatsapp) is solving a problem for potentially millions to billions of people around the world?
Hi Om, I would aim towards serving the ecom sellers. If you can provide them value (for example, by helping them make more conversions with the same amount of store traffic) they will have the incentive to pay you.
We have a video that should release in late October diving deeper into this topic, but for now, you might check out our Building Your First SaaS: The Ultimate Crash Course playlist: ruclips.net/p/PLwcQbu9cKWclSZ5X1D2BFr3t4jBzpiSoi
@@MicroConf Thanks Rob!
@@MicroConf was that video uploaded?
Its too good
Basing equity splits on seniority payrates at other companies seems bizarre.
Any updates on employee equity? Hopping to learn more about it I’m off to google in the interim. Thanks again!
@microconf, what about sweat equity? How can we account for it? Assume capital of USD 1 million capital, and sweat equity is 10%, do we raise the Total 1 million in cash or only 900k? Appreciate you response.
I’m not sure I understand your question. If you need $1M in funding, raise $1M.
Typically, founders who are working in the company share 100% of the equity as long as they are putting in the work (sweat equity, as you’ve called it). Selling any of your shares has to be worth it from a monetary perspective.
is Slicing Pie a popular model for startup, if not is it promising?
I do think it’s a good model, that’s why I referenced the book in the video. Judging the popularity of the book is difficult, but the vesting structure described within the book is used by real startups.
I wished I watched this a year ago. Can you restructure while in operation or?
Restructuring is usually not hard from the legal perspective, it’s hard from the interpersonal perspective. You have to get everyone to agree to exchange shares (or whatever restructuring you have in mind). That can be challenging.
Thanks. That clears it 😁
2,000 what???
40 Hours a Week * 50 Weeks a Year = 2,000 working hours a year. Been looking into the "Slicing Pie" model of splitting equity and same calculation comes up.