Monday, April 16, 2007

Founders' Equity

Last week, YII held a webinar about Founders' Equity with Barbara Johnson and Harry Hanson, Partners at Choate Hall & Stewart.

The webinar will be archived for our Premium Members. In the meantime, enjoy these useful tips from the webinar:

1. When you are issuing founders' equity, think about the percentage of ownership rather than the number of shares and carefully negotiate the shares with each potential partner in accordance to their role in the start-up.

2. If you are considering paying your first employees with equity, remember that you should not think of your equity as "cheap money" that can be given away. With equity, you give away ownership in your company.

3. There are two forms of equity: restricted voting common stock (usually offered to owners/founders) and options (usually offered to consultants and employees).

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