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- Founders should not necessarily split equity evenly among cofounders; unequal splits can help prevent team dissonance and renegotiations as the company develops.
- The timing of equity splits is critical, with most experts favoring early discussions of ownership.
- Companies should strive for capitalization tables that are simple in structure and easy to understand.
- Capitalization tables should have equity pools set aside to anticipate non-founder compensation of new hires.
- Equity dilution from future investors should be viewed in terms of the business’s overall financial strategy.
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Patel, Neil and Dakin, Adam
"Equity Allocation in Startups,"
Academic Entrepreneurship for Medical and Health Scientists: Vol. 1
, Article 3.
Available at: https://repository.upenn.edu/ace/vol1/iss2/3