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Interesting post. It's probably worth adding columns to show things like the founders' return in these scenarios to illustrate where this middle plateau is (whe
by cletus 17y ago
Interesting post. It's probably worth adding columns to show things like the founders' return in these scenarios to illustrate where this middle plateau is (where the investors return is the same or near the same).
- _delirium 17y agoThere's a bunch of other complicating factors, too, which interact with the founders' share. For example, when hiring early employees, startups often use equity as a significant part of the compensation package. But, roughly speaking, the better for the angel or VC the preferences are, the less value any given offer of % equity will have to the employee. So, unless the employee is a sucker, better terms for the angel or VC mean more % equity or up-front salary you'll have to offer the employee to compensate.
- anamax 17y ago> So, unless the employee is a sucker, better terms for the angel or VC mean more % equity or up-front salary you'll have to offer the employee to compensate. Great point. Since equity has to sum to 100 at every point, that "extra" is fairly expensive. If it translates to more salary, it adds risk to the biz.