The Equity Equation. July 2007 An investor wants to give you money for a certain percentage of your startup.
Should you take it? You're about to hire your first employee. How much stock should you give him? Equity - Forming a new software startup, how do I allocate ownership fairly. Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire.
I am going to try to address that question in this post. First, a caveat. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. Getting someone to join your dream before it is much of anything is an art not a science.