How much equity should co-founders get?

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 I have in a startup?

On average seed startups will issue from 2\% to 8\% of stock options (from the fully diluted shares). If a CTO is needed, he may get 1\% to 4\%. Other employees will typically split the rest, adjusted for experience, seniority, needs of the company, and skillset. You typically can ask for 0.25\% to 2.0\%.

How do you give equity to a new cofounder?

For a co-founder who makes considerable capital contribution, you may consider giving them additional founder shares in return. Alternatively, you can consider distributing founder equity on the basis of the individual level of work contribution (sweat equity) from each individual.

How much equity do co-founders of a company get?

Whoever proposed the chief value proposition of the company typically receives the greatest percentage of equity ownership. For instance, one of Instagram’s co-founders was granted a 40 percent equity stake because his technological innovation formed the basis of a company that later became incorporated into Instagram.

How do you choose a co-founder of a company?

Assess of the value of each equity holder’s contribution objectively, even and especially when co-founders share close personal or familial ties. Be realistic, but not stingy. The larger the equity share, the bigger the incentive to help the company prosper. Be patient.

How many options do co-founders of a startup get?

In effect, this would mean that each of the 3 full-time co-founders would end with 625,000 founder options while the ‘evenings’ founder’ would take 125,000 options for that year.

What happens if one co-founder has more seed capital?

If one founder provided more seed capital into the business than the other, he or she will often be rewarded for that through equity. For example, if the co-founders’ contributions to the company are otherwise equal, a 60/40 equity split might be established.