How much equity should I give founders?

As a rule, independent startup advisors get up to 5\% of shares (or no equity at all). Investors claim 20-30\% of startup shares, while founders should have over 60\% in total.

How much equity should cofounders get?

Which is better RSU or stock options?

Stock options are only valuable if the market value of the stock is higher than the grant price at some point in the vesting period. Otherwise, you’re paying more for the shares than you could in theory sell them for. RSUs, meanwhile, are pure gain, as you don’t have to pay for them.

Are stock options part of a company’s equity?

Company equity has many other forms, such as include stock options, bonds, warrants, paid-in capital, retained earnings, etc. Stock options, however, are not part of equity until they are exercised. There are two principal kinds of stock options generally offered to employees: non-qualified stock options (NQOs) and incentive stock options (ISOs).

How do stock options work for startups?

Types of startup stock options Stock options aren’t actual shares of stock—they’re the right to buy a set number of company shares at a fixed price, usually called a grant price, strike price, or exercise price. Because your purchase price stays the same, if the value of the stock goes up, you could make money on the difference.

Do founders have a plan for stock allocation?

So now the founders have a plan for stock allocation from the beginning. This technique is far from precise, but it can be a reasonable technique for starting out. And don’t forget about vesting, in case things don’t work out with one of the players.

How do startups allocate equity to their management teams?

Management teams generally can get data (often from their lawyer) on how other startups have done this allocation. Sometimes this will result in a relatively equal split of the equity.