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Why "slightly" less? Even if it can't be sold, equity in early stage startups has an exact dollar amount attached to it. If one founder needs more salary it sho
by curun1r 9y ago
Why "slightly" less? Even if it can't be sold, equity in early stage startups has an exact dollar amount attached to it. If one founder needs more salary it should be a simple calculation determine how much equity they should give up for that salary.
- gkop 9y ago> equity in early stage startups has an exact dollar amount attached to it No - at least in the US, you avoid pricing your start up until it's necessary, in order to plausibly say the equity is worth as close to $0 as possible, so equity grants result in the smallest possible tax liability. In practice, this means raising early rounds in convertible notes, which don't require the company be priced.
- curun1r 9y agoAt that stage, you're not taking a salary, so your point is moot. This is about startups that can afford to pay founders a salary, and those startups have either raised money at a specific value or are profitable enough that you can't claim the equity is worth $0.
- petercooper 9y agoI think there needs to be some quid pro quo, but early stage startups often have such a low valuation that accurately matching the difference in salary could result in an equity disparity that breaks any pretence of being "equal"(ish) partners.