The Startup Founder's Customizable
There's *A LOT* of information out there about how to (and how not to) divide equity for your startup. After spending the last few weeks reading endless blog posts, talking with lawyers, other founders, and investors I felt better informed but not much closer to an actual decision on equity splits. I decided to build our own tool to assist with this process...and you can too!
Clear expectations and agreements are extremely important to me. Not everyone feels this way, but for me, they are essential to a positive and productive team. Call me a hippie, but I also really value the entire team feeling heard and valued. So, while I built the tool, I am not the only one filling it out. Instead of outline jobs for the team, and saying "here's what I think you deserve" we are flipping the script a little. Each founder is doing three things:
1) Outlining the skills they bring to the table
2) Outlining what the believe their job responsibilities are/should be
3) Completing this equity calculator for the whole company
And now, here's how to create your very own super simple equity spreadsheet!
It's a super simple spreadsheet. On the left column, you can list as many (or as few) categories as you wish. I've outlined the ones we are using above. Then, you can assign a weight (1-10) for the importance of that category.
I found it easiest to visualize if I gave each founder two columns: one for their "score" in that category (1-10), and then one for their "weighted score" (weight of category multiplied by the founder's score in that category). Fill this out for each founder and each category, then add up each founder's total points. In the above case, that's 6 points each.
Now, turn that value into a percent by dividing each founder's "total score" by the total number of point available (6+6+6 here). Et, voila! An equity split.
Once the whole team has filled out the spreadsheet, we'll compare our results and discuss. I hope this is helpful to you and your fellow founders! If you don't want to build the spreadsheet yourself, shoot me an email and I'd be happy to share my spreadsheet with you.