Startup101: How Do I Divide Equity Among My Cofounders And Employees?

So you have just spent six months building a prototype with an early team, punting the question on how to divide the company. Now you are looking to raise external capital essentially forcing you to formalize structure and ownership, generating heated debates. Sound familiar? Having a hard time deciding on how to divvy the startup is the rule rather than the exception. While every situation is unique and ultimately a negotiation, here is an actionable framework to help. With due caveat that small pieces of a large pie are often worth more than large pieces of a small pie. 1)…...