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Ask HN: How best to vest/distribute equity?
I am at the beginning of a new startup (my first) with several other people. I recognize the need to make ownership decisions up front and would like advice as to how best to approach vesting and equity distribution. There are currently 4 people involved in the project (3 who have been working on it for a short time and 1 who is just joining). One founder is from a business/financial background and the other 3 have technical backgrounds.
Is the best approach to determine appropriate amounts of equity and vest it over a period of time, cliff vesting for the first period? What has your experience been and what would you recommend?
- pg 17y agoThe standard is to vest everyone over 4 years, with a 1 year cliff. Omitting the cliff is a highly accurate predictor of problems.
- mahmud 17y agoIs there some kind of a book you recommend for the business ignorant on these matters?
- bhousel 17y agoNot sure about a book, but this blog seems to explain the term sheet pretty well: http://www.feld.com/wp/archives/2005/05/term-sheet-vesting.html http://www.feld.com/wp/archives/2005/05/term-sheet-vesting.h... Admittedly, I just googled. But, if anyone knows of a better book or resource, let me know, since I'm in exactly the same situation as the poster.
- deleted 17y ago[deleted]
- adnymarc 17y agoSo your recommendation would be to assess an individuals contribution as a part of the whole, assign a percentage value, and vest that over 4 years with a 1 year cliff?