Startup Equity Split: How to Distribute Equity the Right Way - Deepstash
Top 7 TED Talks On Customer Success

Learn more about moneyandinvestments with this collection

How to create customer-centric strategies

The importance of empathy in customer success

The impact of customer success on business growth

Top 7 TED Talks On Customer Success

Discover 42 similar ideas in

It takes just

6 mins to read

What is Startup Equity?

What is Startup Equity?

The term startup equity refers to the ownership of a startup, usually demonstrated as a percentage of ownership (or shares) given to individuals that contribute to the growth of a business. These could be your co-founders, investors, employees, and even experienced advisors.

14

194 reads

Fun Fact

Fun Fact

Fun fact: Did you know that Jeff Bezos, the 4th richest person alive and the CEO of Amazon, owns less than 10 percent equity in Amazon, a company he founded? 😉

13

183 reads

Who gets equity in a startup?

Who gets equity in a startup?

When your startup is in the initial stages, the founder or the co-founders usually own it entirely, typically in a 50/50 split, or 60/40, depending on various conditions.

As you grow, equity is distributed among those who contributed to fund your startup, give you advise, or develop your product/service offerings:

  • Co-founders that invested into the vision or business idea.
  • Friends or family members who contributed seed money.
  • Employees who invested their time and skills.
  • Advisors who gave expert advise or network.
  • Investors who provided capital.
  • Other service providers.

16

118 reads

Factors to consider when splitting startup equity (1)

Contribution. One of the most common factors to consider when splitting equity is the relative contribution of each founder, advisor, or employee. This can include things like the time and effort that each one puts into the company, the expertise they bring to the table, and any intellectual property they contribute.

14

109 reads

Factors to consider when splitting startup equity (2)

Roles and responsibilities. Founders should consider the roles and responsibilities of each team member when determining equity splits. For example, a founder who is taking on a key leadership role or an employee who has a more specialized skill set may be entitled to a larger share of the equity.

14

88 reads

Factors to consider when splitting startup equity (3)

Future plans. Founders should also think about long-term goals and how equity splits may impact those plans. For example, if one founder plans to take on a full-time role with the company while the other intends to remain a passive investor, this may affect equity split.

14

92 reads

Factors to consider when splitting startup equity (4)

Market conditions. The state of the market and the industry in which the company operates may also influence equity distribution. Say, if a company is in a highly competitive market or seeking future funding from external investors, the founders need to give a larger share of equity in order to secure necessary capital.

14

69 reads

Factors to consider when splitting startup equity (5)

Legal and tax considerations. There may also be legal and tax implications to consider when splitting startup equity. For example, founders may want to consult with a lawyer or accountant to understand the tax implications of different scenarios to ensure that the company is structured in the most tax-efficient manner possible.

14

83 reads

CURATED BY

rubenlozanome

Growth Marketing Specialist for Startups.

CURATOR'S NOTE

Because we don't think about how to distribute equity in a startup until is late and when it is complicated to change things.

“

stash-superman-illustration

Explore the World’s

Best Ideas

200,000+ ideas on pretty much any topic. Created by the smartest people around & well-organized so you can explore at will.

An Idea for Everything

Explore the biggest library of insights. And we've infused it with powerful filtering tools so you can easily find what you need.

Knowledge Library

Powerful Saving & Organizational Tools

Save ideas for later reading, for personalized stashes, or for remembering it later.

# Personal Growth

Take Your Ideas

Anywhere

Organize your ideas & listen on the go. And with Pro, there are no limits.

Listen on the go

Just press play and we take care of the words.

Never worry about spotty connections

No Internet access? No problem. Within the mobile app, all your ideas are available, even when offline.

Get Organized with Stashes

Ideas for your next work project? Quotes that inspire you? Put them in the right place so you never lose them.

Join

2 Million Stashers

4.8

5,740 Reviews

App Store

4.7

72,690 Reviews

Google Play

Ashley Anthony

This app is LOADED with RELEVANT, HELPFUL, AND EDUCATIONAL material. It is creatively intellectual, yet minimal enough to not overstimulate and create a learning block. I am exceptionally impressed with this app!

“

Sean Green

Great interesting short snippets of informative articles. Highly recommended to anyone who loves information and lacks patience.

“

Shankul Varada

Best app ever! You heard it right. This app has helped me get back on my quest to get things done while equipping myself with knowledge everyday.

“

samz905

Don’t look further if you love learning new things. A refreshing concept that provides quick ideas for busy thought leaders.

“

Jamyson Haug

Great for quick bits of information and interesting ideas around whatever topics you are interested in. Visually, it looks great as well.

“

Laetitia Berton

I have only been using it for a few days now, but I have found answers to questions I had never consciously formulated, or to problems I face everyday at work or at home. I wish I had found this earlier, highly recommended!

“

Giovanna Scalzone

Brilliant. It feels fresh and encouraging. So many interesting pieces of information that are just enough to absorb and apply. So happy I found this.

“

Ghazala Begum

Even five minutes a day will improve your thinking. I've come across new ideas and learnt to improve existing ways to become more motivated, confident and happier.

“

Read & Learn

20x Faster

without
deepstash

with
deepstash

with

deepstash

Access to 200,000+ ideas

—

Access to the mobile app

—

Unlimited idea saving & library

—

—

Unlimited history

—

—

Unlimited listening to ideas

—

—

Downloading & offline access

—

—

Personalized recommendations

—

—

Supercharge your mind with one idea per day

Enter your email and spend 1 minute every day to learn something new.

Email

I agree to receive email updates