We would like to show you a description here but the site won’t allow us. Already a Tech Co-Founder. Equity Calculator for Equity in Start-up Companies. Startup Founders Startup Operations. That said, it’s unlikely in most cases for non-founders to receive more than 5% of the business (bringing on a CTO can be the one common example of exceeding this mark). Type any values/percentages into the inputs, and the outputs will update. Calculating your equity stake is a crucial skill for any startup founder, as it can help you negotiate better terms and protect your interests. Option pool: 20 percent, which can be divided up among. Setting a value for your stock now rather than later is generally preferable. The average equity share for a startup founder varies widely but is often in the range of 20-30% after multiple funding rounds. It usually happens a few months after the constitution of the startup. By taking this course and utilizing my easy-to-use Startup Equity Calculator (UPDATED to handle up to 7 cofounder slots--more than what 99. To be sure, if you raise a priced round at a high valuation, the long-term difference in dilution between raising $250,000 through notes and, say, $750,000 won’t be much. Co-founder Equity Split. As noted above, this model is intended more for educational purposes than for performing serious valuations. As you progress beyond this stage, you will. For instance, consider this simple equity structure without founder vesting: Co-Founder 1 – 40%; Co-Founder 2 – 40%; Investor – 20%; If co-founder 1 decides to leave, he will take 40% of the shares with him. By taking this course and utilizing my easy-to-use Startup Equity. 5% to 2% stake for a key employee at the executive level. Comparable Pricing Method. This can be taken from similar job postings and the market as a whole. 7M from top-tier VCs and had 6 employees (4 founders & 2 others. Churn Rate: The rate at which a startup loses customers during the acquisition process. For example, if a worker is worth CAD 10000, and the share price is worth CAD 5, then the sweat equity, she will receive is CAD 50000. 2. For example, under a 4 year vest with a 1 year cliff – if the co-founder leaves or you fire them within the first. The Pie Slicer. It will depend on how many founders you have and their contribution to the success of. Please use the calculator at your own discretion and direct any questions or. 3. These are remarkable levels of CEO ownership and founder equity upon going public/exit, but. 5% Per Brad Feld, askthevc blog, 1-16-08Adjust the dilution calculator inputs below to reveal what happens when you sell equity to grow versus using founder-friendly debt financing. From this allocation, make equity splits across co-founders. 3%. Who gets equity in a startup. A better approach is to use a co-founder equity calculator or a framework like the Slicing Pie model to determine a fair and dynamic equity allocation based on actual inputs and outputs. Carta’s co-founder equity split tool is a dynamic tool that asks questions about the company and each founder—their roles, responsibilities, skill sets, and other factors—to model a recommended founder equity breakdown. 409A valuations get their name from the section number 409 of the Internal Revenue Code, which went into effect on January 1, 2005. Startup Equity Calculator. There are multiple methods to calculate your equity ratio. You will make mistakes and when you do, you'll need. But for different startup companies, this combination of 4 groups can have different categories. Drawbacks of Equal Splits. Kiss: Free legal docs for startup founders and investor. 25 after two years. Co-Founder 2 alone can not run the company and there is no equity left to hire new talent. It’s simpler dividing a multiple of 10 than it is a multiple of 3 or 7 or 8. Many of them are experienced entrepreneurs with. As your business grows, you may also decide to raise additional capital. Although we find this tool to be of value to our clients, we do not sponsor its use or work directly with its developers. Experience of raising a round. Step 1 - Dividing equity within the organization. If your startup is making $200K ARR, we can find a non-dilutive financing solution for you. It is usually distributed by percentages of shares of stock in a company. 00001. A typical (minimum) vesting schedule for a founder is 48 months with one-year cliff, but vesting. Limit the stock option pool. The 3-person executive team, including a CEO if one was hired, owns 10%, and splits $3. The founders startup calculator equity helps to calculate the value of your own founder equity split and help you allocate equity to all your founders, employees and partners. As a founder, the board of directors at your startup will have a statutory obligation to only offer shares or stock options to employees and advisors at what is known as “fair market value”. For 2023, the average startup CEO salary decreased by 5. Startup Equity Calculator: Figure out how much equity to grant new hires in seconds. 45% of salary. (We’ll get to splitting up equity in a moment. 067% is too little or too much? Jump to the last section to learn more. Take advantage of our free startup valuation calculator by answering the following 25 questions, and we’ll calculate an approximate valuation range. The problem for other investors (especially founders) is that the lower the cap, the better for the investor. APPLY NOW. This information is critical in understanding the company’s valuation and potential return on investment. At a typical venture-backed startup, the employee equity pool tends to fall somewhere between 10-20% of the total shares outstanding. To determine what those may be, and how the value of your equity may grow despite founder dilution, you can use the following dilution calculators: How to Calculate Founder Dilution; Illustrating Founder Dilution; Best. This free tool (based on Gust data) will help you ask the right questions to determine how much value each founder will contribute, and give you a sensible, objective recommendation for a fair equity split. Legal contracts can be costly and time-consuming, especially for busy startup founders. Equal ownership equity splits are determined by dividing 100% of the equity shares by the number of co-founders involved in the start-up. Equity-based compensation plans often require smaller upfront costs than traditional forms of employee compensation, such as cash bonuses or salary increases. In that case, the investor ends up losing their money. . Be very suspicious of yes-men: they find everything you say great, and think all your ideas are awesome…. Once you’re happy you can submit the 409A report to your. Here is the formula Buffer uses to calculate equity and the percentage of the company each team member has the option to buy. In the end, however, they don't have your back. The sheets in the cap table. Co-Founder Equity Calculator which takes into considerations roles, contributions and risks: Foundr: Co-Founder Equity Calculator. Advisor Contribution (Standard, Strategic, Expert) Company Stage (Idea, Startup or Growth) For Example. Screenshot from the Co-founder Equity Calculator. Most companies use. Here is a co-founder equity calculator that can help you through the process. On average, founders offer 10-20% of their equity during a seed round. risk as probability of failure is the same across all employees, but the EV opportunity costs for techies is much higher, because the average income at x years experience is drastically higher for techies vs biz. However, it is important to note that only one founder from each company filled out this survey in 99% of the cases, so this is only indicative of one founders compensation, not the entire founding team. Angel Investors: 20 to 30 percent. Follow these steps to calculate a baseline valuation figure: Calculate your revenue run rate (RRR), which is the most recent month’s sales times 12. Attorney Mary Russell counsels individuals on startup equity, including: Compensation Counsel on Job Offers. Make better decisions, faster with an AI decision engine!The legal remedy was sought following recent controversial posts by Grover on social media. This is great for coming up with a starting point. As an employer, any startup founder should pay the following taxes. Startup value: Total startup score * Average valuation of similar startups. ) They had built some. , are used in calculating a company's valuation. 99% of you will need), you. VC is the first Venture Capital firm to invest in early stage startups using founder friendly India SAFE Notes. 3. DOWNLOAD the Template. Most founders sell around 20% of the company’s equity to investors at the seed stage and another 15. FounderEquity •Founder Equity: Not a legal term but used in common parlance to refer to the shareholding (ownership) given to someone who participates in the initial creation and early stages of a startup. To use the Startup Cost Calculator: 1. Get started for. Founders equity calculator. The value of shares issued by a startup (or other company). Appoint your board of directors. In this guide, we talk about the fundamentals of startup equity distribution: What is startup equity; Who gets equity in a startup; Factors to consider. Determine the gap between their salary and total compensation. That 12. The list below shows founder or CEO ownership of 178 tech companies at IPO. Once you have all the necessary numbers, it’s much easier to compare multiple offers (or compare your new job offer to your current equity package). For a hi-tech startup, the ideal weight should be around. Here are three methods you can use to calculate founder equity: Method 1: Equal Split. Your startup is gaining pace, and you are bringing on an all-star staff and board of advisers to help you build it. The first VC round makes up Series A. Check Out the Pie Slicer! Manage the contributions of your whole team using the online Pie Slicer software. Previously Brad Feld has argued that a founder CEO will be in the 5-20% range, a founder CTO in the 2-10% range, other co-founders between 3-7% and non-founder. TLDR Stock Options was built to help employees and advisors understand the high-level potential value of stock options at a company's exit and to more fully learn about the factors that will affect their equity's value over time. Let’s assume that the venture capitalist puts your company’s current value at $4 million (pre-money valuation) and decides to invest $2 million. Equity capital is the capital/finance that a business raises from investors in exchange for equity or stock (in this context, equity capital can be an alternative to debt capital). [startup] founder is, put simply, the. For example, the founder of a tech startup company may value the efforts placed towards developing the company at $200,000. The typical triggers of a. The company's stock plan will receive 1,000,000 shares. But to create an effective option plan you need to know how much to award to each team member. In total, there are now 13,000 shares of company stock (on a fully diluted basis)—and just like that, you now own only 77% of your company (10,000/13,000) instead of 100%. How to Handle a Co-Founder DepartureStartup equity refers to ownership in a startup company, typically in the form of shares or stock options, granted to employees, founders, and investors. Here we will make a scenario for a startup where the founder holds 100% ownership of the company and how it decreases with each and. At each round, a new investor will ask for 10-25% of equity (dilution), and a top-up of employee share options (ESOPs) Round size increases by ~5x between each financing round. In 2023, the average startup founder’s salary will be around $148,000 per year. The problem wasn’t the time(s) when I would be. This first portion is known as the cliff. Index VenturesOptionPlan. Taxes. in other words, assuming equal experience, you'd be making $120k while they're making $80k, even in the same markets. Then, multiply the resulting number by 100, and you will have your profit margin. One major complicating factor with granting equity in an LLC is that W-2 employees of an LLC cannot hold equity in. A tool like this equity calculator can be a helpful way to take a more nuanced approach. It’s even harder to get customers to find it, try it, and pay for it. Down Round Protection. Weight. The number of shares available in the business is at the discretion of the founder or co-founders of the. The Startup Calculator can help co-founders understand the ultimate financial outcome for. Currently available for Australia Pacific companies only. The ideal co-founder will agree on most things (80%), but will disagree a bit and bring you a different perspective (20% of the time). Here are some considerations for startups when one of the founder leaves. Initially, founders own 100% their startup’s equity, though they eventually give away the majority of their equity over time to co-founders, investors, and employees. As with all strategic business decisions, there are several factors to consider when awarding equity to employees. 5 million / 10 million x 100%, respectively). Legal Counsel on Other Equity Choices. At a £2,000,000 valuation, Seed Legals found that the average founders’ salary was £25,000, rising to £52,000 and £80,000 at £4,000,000 and £6,000,000 respectively. You input all the shareholders here. The initial allocation of this equity will be broken down into three groups: Founders will be allocated 8,000,000. Foley’s Startup Advisors answer questions that entrepreneurs need to know for their startup venture. We multiply 10 by the weight of 7 to get 70 points. they love you, and with some savvy negotiation, they invest for 10% equity. How to calculate return on equity (ROE): the full guide. The simplest and quickest way to calculate startup equity is by having each founder. A startup equity calculator can help you make equity projections and get a better understanding of your stock options. The discount in a SAFE is used as a mechanism to address the higher risk of investment that SAFE investors take when investing in an early-stage startup. e. For example, let’s say a pre-seed startup has a pre-money valuation of $500,000, and the founders own 80% of the company. These include their level of. “Fair Market Value” is the notional value of stock on the market at the time of sale. Let’s assume that a company has a total of 10 million shares issued, and a founder holds 4 million shares while another holds 2. The Co-Founder Equity Split Spreadsheet has 5 different calculators in it, and a final box that averages everything out among all 5. e cost of a mobile application. But why is it necessary to get a valuation done periodically?The term “founders’ equity” is no different than any other equity; it refers to the equity that founders own or the equity that is given out at the formation stage of the company. Define the role you are looking to hire. The remaining $36 million is divided according to equity ownership. Experiencing the Thai startup ecosystem for almost a decade, HUBBA professionals have put considerable effort into relieving the founder’s pain in building a business. Let’s look at a hypothetical example. you have a choice to make: $10,000 additional salary or ~30% more equity. The calculus is different if the CEO or COO/President was a Founder: Founder CEOs retained on average 33% ownership in their companies (median = 25%), while Founder COOs/Presidents retained ~14%. The difference of 100,000 is the number of shares that need to be issued. That said, it’s unlikely in most cases for non-founders to receive more than 5% of the business (bringing on a CTO can be the one common example of exceeding this mark). Option pool: 20 percent, which can be divided up among. 1. Startups should use an independent, outside valuation firm to get a 409A valuation before offering stock options to employees to avoid fines and legal issues with the IRS. 2%, Founder 3 16. Therefore you should continue to offer less equity in each subsequent round. 1. Founders: 20 to 30 percent divided among co-founders. This can be taken from similar job postings and the market as a whole. No early stage startup will be able to accurately. 75BN in funding, and building products. Our free startup equity calculator can help you understand the potential financial outcome of your offer. The effect of ESOP on ownership? Use the startup dilution calculator to understand impact of ESOP & VC on founders. 067% of the startup, which you can use to buy equity in your startup by paying. 2. The simplest way for founders to launch and run a startup:1. Co-founders and early employees often expect initial work compensation with startup equity. Early startup employees take on a lot of risk and deserve more upside in terms of startup equity & options. Already a Tech Co-Founder. If a company has 10,000 shares outstanding, each share entitles the owner 0. 235M max. 2013. calculator. The average founder/CEO holds roughly 14 percent equity at the company's IPO, while an outside CEO holds an average of 6 to 8 percent. Have traction? This next set of calculators helps you determine the. This is mainly true for two-partner, 50-50 equity splits. A typical (minimum) vesting schedule for a founder is 48 months with one-year cliff, but. We did all the hard work for you and reviewed popular schools of thought on splitting equity and have boiled it down to what we believe is the most practical and direct way to calculate. see all features Distribute equity to advisors, co-founders, and. Most commonly, startup advisors are paid with anywhere between 0. Co-founder Equity Calculator helps co-founders split the baby. You also give an investor 2,000 shares in return for some much-needed capital. On average, founders offer 10-20% of their equity during a seed round. Decide how much of their total compensation you. Agile funding: Break out of the funding round cycle. Automate your equity plan. It is for this reason that Y Combinator introduced SAFE notes in 2013,. EQUITY DILUTION CALCULATOR. In this guide we go through important questions about startup equity for founders, employees and investors, including cap table management, splitting equity with your co-founders, common and preferred share classes, vesting schedules and employee equity compensation. Revenue. With the FAST agreement, founders and advisors can agree on how to work together, what to accomplish, and the right amount of equity compensation in a short and simple 5-pager. termination – Amicable departures are generally easier than terminations. “Par value” or “face value” is the lowest price for which a company can sell stock. The Founder/Advisor Standard Agreement, or “FAST”, was developed by the Founder Institute to make the advisory agreement process more efficient for startup founders. See the "Getting a Job at a Startup" chapter in Part III, Teams for more info. Startup Equity Calculator & Benchmarking | Cake Equity TOOLS Equity benchmark calculator Use Cake's Equity Benchmarking tool to answer the question. Smart People with Good Intentions. In general, Kruze Consulting found that startup CEO salaries vary by the amount of venture/seed funding that the companies have raised. It is for this reason that Y Combinator introduced SAFE notes in 2013,. A third popular arrangement is when one founder, which Bahat calls a senior controlling partner, has slightly more equity than the rest. You can ask questions and iterate on the report with your analyst. How to split equity among co-founders : YC Startup Library | Y Combinator. This calculator shows how to determine a founder's equity dilution after a single round of fundraising/capital increase. This is mainly true for two-partner, 50-50 equity splits. FURTHER READING. This startup equity calculator can be used to help estimate the amount of equity each founder and investor receives. Equity Distribution: Instead of splitting equity equally among co-founders, distribution should be based on the allocation of responsibilities and expected contributions, reflecting the differing levels of commitment, skills, and value each founder brings to the startup. You can go ahead and purchase 10,000,000 shares for $1,000, and each share will be worth $0. One such method is the Founder’s Pie calculator. Download the Calculator. This can be taken from similar job postings and the market as a whole. For example, a COO could receive a $110,000 base salary, a 20 to 30% bonus for hitting specific milestones, and some equity. They agree that the amount of capital that each invests in the venture will account for 50% of the equity split and they will divide the other 50% equally. Optimize Equity withTLDR Stock Options Tool". Not sure if 0. Just keep in mind that this tool cannot be used independently, as the website also admits. Most startups fail. This is great for coming up with a starting point. This concept is known as dilution, and it's something we'll cover soon in this startup equity guide. Index VenturesOptionPlan. Under “Prior Round,” select round type and enter the post-money valuation. 1 | Introduction of a co-founder at early stages. If you have advisors that are indispensable to the venture, it may be worth it to give them a small percentage. Use equity management softwares. The startup equity calculator is used by entering details of each investors and founders. Now that you understand the cap table dilution formula and how it is calculated, you can calculate the dilution in investment or ESOP. Many first-time founders have little clue about how capitalization tables work when they are launching a new startup. Once purchased, you’ll distribute the shares amongst co-founders. com. Incorporate in Delaware, 2. An equal equity split suggests that all the founders have the same value, and, as noted above, that may no longer be true. 99% of you will need), you'll learn how to avoid this unfortunate, yet totally. Sweat equity is the term that’s used to describe any non-monetary contribution that a person or a company makes towards a business. After a year, a founder is entitled to 25% of their equity. Part 1. To build on the example, let’s say. Share dilution can change both your financial stake in the company and how. You also give an investor 2,000 shares in return for some much-needed capital. Median CEO -Founder 100k-250k 200k 0-100k 5-20% 9. Simply enter your information into the fields below, and the calculator will do the rest. Please use the calculator at your own discretion and direct any questions or. A resource for entrepreneurs and founders of startups in various stages of growth, WilmerHale Launch is your source for answers to the questions that impact you every day. The reality is that there must be a single leader who has more equity and thus has the decision-making power. Calculate how many shares need to be issued to reach your ownership target. Without the 83 (b), your taxable. But, to stay on the well-trodden path to success, getting your finances and investments in order is essential. • Startup founders • Co-founders • Entrepreneurs So, you have a great business idea. Equity Capital. The global SaaS platform for founding, operating, and investing in scalable, high growth companies. Welcome to the Co-Founder Equity Calculator! It is based on almost 3 years of one-on-one discussions with entrepreneurs through the co-founders. The founder equity split should be a considered, not hasty, decision. Under “Next Round Assumptions,” fill out the estimated date of your next round, the company’s. Our startup equity calculator is designed to help quantify each of a startup’s co-founders’ contributions in order to more accurately split equity in the company so you can prevent. That figure is £5. Add your. An operating system for your startup👨💻. By taking this course and utilizing my easy-to-use Startup Equity Calculator (UPDATED to handle up to 7 cofounder slots–more than what 99. Usually, for seed rounds, investors will take 10-20% of your business’s equity. But, when a significant layer of value was added to the startup, each founder could receive a different percentage of that new layer, based on his or her. Ledgy takes care of it. In my world, the non-founder equity pool is 20% max. Salary replacement. The simplest and quickest way to calculate startup equity is by having each founder get an equal share of the company. 1. Assume that we have a high technology start up spinning out of a university with four members of the founding team. It represents a stake in the company's future success and potential financial gains. As you progress beyond this stage, you will have less equity to offer. That rounds up the amount to the amount pre investment of 12. 0% President / COO -Non-Founder 150k-230k 200k 0-75k 1-3% 1. The range is wide. So, if you'd provide employees with paid day-offs, the final salary costs increase. So what does the data. The Startup Equity Calculator collects information on each of your co-founders’ roles and responsibilities, and proposes a fair equity split to make everyone happy. However, the median startup CEO pay increased from $140,000 to $145,000. It’s almost never worth it to go to a startup vs faang unless the amount of equity is large, like single digit percentages. 2. CEO and Founder of Kruze Consulting. The average founder/CEO holds roughly 14 percent equity at the company's IPO, while an outside CEO holds an average of 6 to 8 percent. Mark Zuckerberg owned 21% of Facebook, Sergey Brin and Larry Page owned 31% of Google, and Reed Hastings owned 24% of Netflix. SAFE is an acronym for Simple Agreement for Future Equity. Founders might end up on the line for a lot of money. As startups grow, founders may give out stock options to employees, advisors, and board directors to compensate for their work. Equity is the ownership stake that founders, investors, and employees have in a startup. Define the role you are looking to hire. We have founder equity as displayed in the table below. What is the average dilution of a startup after funding rounds? The average dilution of a startup after funding rounds can range from 20% to 60%, depending on the number and size of rounds. Startup equity. Funding and exit simulations. If you have more than one founder, you can choose how you want to share ownership: 50/50, 60/40, 40/40/20 ,etc. g. Stakeholder name: the person. 50/50 or 20/20/60). Startup Equity Calculator. A good CTO knows how to manage people and build a team, what strategy to choose for product development, and how to put efficient programming processes in place. But to create an effective option plan you need to know how much to award to each team member. The company bylaws typically authorize the company directors to get an EIN and setup a bank account for the newly formed corporation. Here’s a super simple example: We each own 50% of the company. But the difference becomes more substantial if the valuation that you are able to raise at begins to rapidly decrease. This increases the threshold for the calculations from $107,000 to $124,000, increases the lower Reg CF threshold for investors from $2,200 to $2,500, and increases certain thresholds on the 12-month amounts that issuers can raise (e. How much equity to give a tech cofounder (according to Founders Pie Calculator) Aspect. 50 after one year and $0. and competition. Average Startup CEO Salary in 2023. An extension of point #1. Ashton Kutcher and investment partner, Guy Oseary, invested $500,000 in Airbnb’s Series C round for an estimated . The standard, she knew, was a roughly 1. Phase One - Startup Equity - Avoiding Early Mistakes Phase Two - How Startup Equity Works Phase Three . On the other hand, convertible notes allow for conversion into the current round of shares or a future financing event where a. If you feel awkward about the results – for example, you’ve overstated your contributions, you can recalculate and. We may have only invested $100,000 of our time and capital but wind up with 40% of the entire company. Companies use equity compensation to incentivize employees to stay at the company and close the compensation gap between startup salaries and larger companies. Part 1. Try the calculator Capbase is for founders planning to The complete platform for your startup, from launch to exit. This way the investor ensures the best. Startup equity calculator determines ownership percentages and share prices for a startup after a funding round, considering founder shares, ESOP pool, and investor. The type of equity that we’ll be sticking to throughout this article is stock that represents an ownership interest. • New business owners • Startup founders • Co-founders • Entrepreneurs So, you have a great business idea. Pre-Money Valuation Calculation. It is a crucial factor that determines the value, incentives, and control of the company. For example, a cap table can show the company’s founders and key employees first, followed by venture investors, and then angel or minority investors such as family and friends. Regardless of your capital at launch, 10 million authorized shares is generally the sweet spot for a new startup company and the number of shares that most corporate law firms would recommend to. Because convertible notes are debt, if a startup fails to raise a Series A, they may have to pay that money back to the investor. The Capital Calculator enables you to compare the amount of dilution that would be experienced by common shareholders from the issuance of preferred stock under different financing terms. Taxes paid at sale (20% LT capital gains & 35% ST capital gains tax rates) $200,000. It allows founders to structure the equity plan to meet their needs and provides incentives to employees that are appropriate for their contribution level. (according to Kruze Consulting) As a startup founder, you have many complex decisions to make—the trickiest one may be how to determine your salary. 5 million shares. The Founder/Advisor Standard Agreement, or “FAST”, was developed by the Founder Institute to make the advisory agreement process more efficient for startup founders. However, the price used for SAFE 2 is not $0. You and your co-founders can answer a series of questions and get an unbiased estimate for how to break up ownership. The equity split at 20% for the founders will typically be; 20-25% for the management team, 20% for the founders, and 55-60% for the investors (angel all the way to late stage VC). Giving more than that to an investor is too much, which is risky for your business. Source: The Founder Institute. ; Defining Roles and Additional Factors: Before discussing equity, define each. Previously Brad Feld has argued that a founder CEO will be in the 5-20% range, a founder CTO in the 2-10% range, other co-founders between 3-7% and non-founder. In this article, we cover how you can determine which type of investment will meet your startup’s needs and help you gain access to funding. Putting it all. 6 million. Allocate the different items, tasks, areas in Column A. Entrepreneurs know how important stock options are for hiring and retaining the best talent. Summary. " * * *. How to Determine the Right Amount of Equity for a Startup Employee. So, how much should you ask for? It really depends on your situation. Option pool: 20 percent, which can be divided up among employees. Although we find this tool to be of value to our clients, we do not sponsor its use or work directly with its developers. Download the free calculator. Investment Amount / Valuation = % Equity Offered. If there are five co-founders, each co-founder receives 20% equity in the company. It’s hard to raise money. Option #3. Often, startup founders, employees, and investors will own equity in a startup. They're the people who contribute their time and expertise to startups — time and expertise that's absolutely invaluable to a company's growth as founders often wear a million different hats and learn on the go. You should generally aim to reserve 10-15% of your total company equity for an employee stock option pool. The one big inevitable topic is ‘equity’, and YES, it can be uncomfortable among founders to talk frankly about it, especially in Thai culture. How to use the startup equity value calculator step by step? If you're a startup founder, equity is likely one of the most important things on your mind. Look, starting a new venture is hard, but having to figure out what is fair for each cofounder shouldn't be. In this guide we go through important questions about startup equity for founders, employees and investors, including cap table management, splitting equity with your co-founders, common and preferred share classes, vesting schedules and employee equity compensation. Equity Calculator; Equity Tables; Splitting Equity Between Founders; Further Reading; These startup resources are based on the book Hello, Startup: A Programmer's Guide to Building Products, Technologies, and Teams by. Single-trigger accelerations cause the full or partial vesting of employee stock when a company changes control. Startups with Traction. Bringing decades of experience from startup, scale up, legal, entrepreneurship and fortune 500, we're on a mission to empower founders and their teams, by making global equity simple and fast, so they can go build a better future for all of us. 5% equity. Why startup founders should build a strong team . 1,572,495 new ESOP shares are made to ensure there is a 10% ESOP post the round. The risk of setting up a startup on your own . This free tool (based on Gust data) will help you ask the right questions to determine how much value each founder will contribute, and give you a sensible, objective recommendation for a.