Fundamentals
For Founders
One of the most important things that will enable you to retain control of your company is equity. When you're finding people to help you along the way on your project or startup, there might not yet be any cash in the business. Or there might be a little bit of cash, but you need a way to distribute it fairly. The right way to split is almost never 50/50 or 33/33/33.
Getting someone to join your team and giving them equity from the start, hoping they pull their weight is not longer the best option. More and more teams are using dynamic equity. There is an entire movement of groups individuals around the world working together for equity.
It works like this
- 1.The team all log hours as they work and the people who work the most, own the most.
- 2.If someone pays for something for the company, they can file it as an expense and their equity goes up as a result.
- 3.If someone does a particularly good piece of work, they can be rewarded with a bonus or commission.
The old way: decide at the start of a project how to split the ownership. Give everyone a percentage that you think they deserve and hope everybody pulls their weight for as long as possible.
The new way is automatic. Ownership in exchange for good work is a daily motivator for the whole team. Full visibility of who is active and engaged.
Last modified 4mo ago
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