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Some of the arguments are a bit difficult to follow, if not swallow: > Small variations in year one do not justify massively different founder equity splits in
by mmt 8y ago
Some of the arguments are a bit difficult to follow, if not swallow:
> Small variations in year one do not justify massively different founder equity splits in year 2-10.
Yet this is, essentially, how it's done for employees. At least recently, YC seems to be embarking on a campaign to bridge the gap in risk-vs-compensation between employees and founders, as they did between founders and investors.
> More equity = more motivation.
I'm not sure this is always true. I can certainly attest to its falsehood when equity is in the sub-1% range, as for most employees.
Even assuming its truth, however, since equity is zero-sum, that means that the motivating ability (the "more"-ing characteristic) of equity is zero-sum, too. It doesn't, however, mean that its motivating ability is the same on every founder, nor that such motivation is of equal value.
> If you don’t value your co-founders, neither will anyone else.
> Startups are about execution, not about ideas.
Besides potential other critiques, the above two concepts seem, to me, to contradict each other.
> Equity should be split equally because all the work is ahead of you.
> what we almost always recommend at YC: equal equity splits among co-founders.
All that said, I think this is probably the best reasoning: equity split at the beginning isn't likely to be something worth spending a ton of time/stress on for the vast majority of early startups, so equal split makes a sensible default.