For a hi-tech startup, the ideal weight should be around. Home Work. One of the most important things you should work for is to handle a co-founder’s departure professionally and respectfully. The first investors in your startup are likely to be friends and family or angel investors. Share. For example, under a 4 year vest with a 1 year cliff – if the co-founder leaves or you fire them within the first. Senior controlling partner. Be very suspicious of yes-men: they find everything you say great, and think all your ideas are awesome…. This calculator walks you through a variety of events that can affect the division of a startup's equity. The founder’s stake of 60% is now worth $12M despite the dilution (i. The formula for the cost of capital is composed of separate calculations for debt and equity. A well-calculated valuation ensures that equity distribution is fair and aligns with the individual contributions of each stakeholder. 6577. Who gets equity in a startup. Incorporate in Delaware, 2. Co-Founder Equity Split Template. Then, multiply the resulting number by 100, and you will have your profit margin. Optimize Equity withTLDR Stock Options Tool". This might mean personal savings, starting your. A co-founder equity split calculator can give you a co. On average, founders offer 10-20% of their equity during a seed round. Learn to use a simple framework and my robust calculator to help you and your cofounders to find a fair equity split. Dividing Equity. A common caveat is that the founder receives no equity if they split before the one-year mark. That rounds up the amount to the amount pre investment of 12. German: intensified elementary use of the language (A2 level)The founders will hold an 80% stake and the investors 20% prior to the creation of the employee option pool. Here’s a TL;DR summary of the most important rules you should stick to when splitting equity amongst co-founders: Rule 1: Aim to split as equally and fairly as possible; Rule 2: Don’t take on more than 2 co-founders; Rule 3: Your co-founders should complement your competencies, not copy them; Rule 4: Use vesting. You and your co-founders can answer a series of questions and get an unbiased estimate for how to break up ownership. Add your. Your founders’ agreement will be unique to your business, but all founders’ agreements should cover some basics. An option pool sets aside a chunk of equity for employees that helps evenly spread out the stock dilution of each shareholder’s ownership as the company grows. 3%. 45% of salary. Try the calculator Capbase is for founders planning to The complete platform for your startup, from launch to exit. 1:46min. There are multiple methods to calculate your equity ratio. The simplest and quickest way to calculate startup equity is by having each founder. Here, the emphasis is on distributing shares fairly via several differently weighted metrics based on their importance in forming the startup. You also give an investor 2,000 shares in return for some much-needed capital. Check Out the Pie Slicer! Manage the contributions of your whole team using the online Pie Slicer software. A cap table, or capitalization table, is effectively a snapshot in time that reveals who owns what in a company, and how big their slice of the cake is. If you have more than one founder, you can choose how you want to share ownership: 50/50, 60/40, 40/40/20 ,etc. Pre-money valuation Investment in New shares issued. 2. Share dilution can change both your financial stake in the company and how. The value of shares issued by a startup (or other company). Your startup and own 100% in common, founder stock. All the calculations that happen in the background are in this sheet. In the Silicon Valley Startup Attorney article, “Founders & Startup 101: I) Forms of Equity”, Chris Barsness outlines the most important terms that founders need to know in the world of startup equity and vesting. 50. The quantity of capital that may be obtained and the conditions on which it becomes available are both impacted by how much it adds to the startup’s value and can be calculated using a startup equity calculator. In this scenario, perhaps the senior controlling partner came up with the idea and is serving as the founding CEO. But if you do, then taking equity is a no-brainer," he says. Following the transactional approach, the team agrees that co-founder A should receive 25%, plus ¾ of the remaining. 3. Look Forward Dilution: Comparing. SAFE 2 is $0. However, it is important to note that only one founder from each company filled out this survey in 99% of the cases, so this is only indicative of one founders compensation, not the entire founding team. Only 12% of these unicorns have fewer than 250 employees. 2%. Typically, a founder starts out owning 100% of a company and, every time capital is raised or shares are issued, that ownership stake is reduced. . Startup Equity Calculator You were granted. To be sure, if you raise a priced round at a high valuation, the long-term difference in dilution between raising $250,000 through notes and, say, $750,000 won’t be much. Companies use equity compensation to incentivize employees to stay at the company and close the compensation gap between startup salaries and larger companies. CFOs, Heads of People and law firms love that Ledgy. In the last step, the following formula is used to calculate the startup’s value. Here are four factors to consider for an optimal startup equity distribution for founders: 1. A cliff period means that during that period, no shares are owned by the person. Ledgy takes care of it. To calculate this figure, subtract total expenses from sales and divide by revenue. Spargo says the calculator is built to help founders “understand the impact that their salary has on the long term value of their equity” by using a graphical representation to show how paying. Startup Equity Calculator: Figure out how much equity to grant new hires in seconds. LLCs allow for owner income to be taxed as pass-through income; in practice, startup founders will rarely be able to take advantage of this tax. Essentially, startup equity describes ownership of a company, typically expressed as a percentage of shares of stock. The company had raised $1. As your company grows, and the chances of success and stability increases, then founders can increase their salary compensation over that period. It’s better to have more shares than you need, for the sake of future issuances or to maintain founder control. Consisting of 10% – 20% ownership of your company, this pool is typically drawn from founders’ shares. APPLY NOW. Most companies use. Some founders determine equity per employee based on the seniority of the position, while others maintain equal equity among employees regardless of role. equity calculator excel spreadsheet co-founders split. You can write from 2 to 5 different co-founders. However, startup employees expect to receive other forms of compensation—usually equity in the company—with the hope that these will make up for the lost wages in the long run. 1) Time Spent on the Startup. In this way, cap table modeling can help founders forecast the dilution of their holding and their potential payout based on the share ownership within the company. Equity calculator. Share dilution can change both your financial stake in the company and how. “Equity ownership is not only important for aligning incentives between founders and investors, but crucially it drives alignment across the entire organisation. The Founder/Advisor Standard Agreement, or “FAST”, was developed by the Founder Institute to make the advisory agreement process more efficient for startup founders. Tips on handling a startup co-founder’s exit. If you want to give up less equity, you’ll need to reduce the amount of investment needed, or increase your valuation. What happens to existing shareholders in an IPO. The pro forma results can be carried over to our Liquidation Calculator to determine the proceeds to stakeholders under various exit scenarios. Option #3. Entrepreneurs know how important stock options are for hiring and retaining the best talent. 2. by Greg Miaskiewicz • 8 min read published April 4, 2021 • updated August 17, 2022. For us, anything that has the word ‘simple’ is already winning! At Cake, it’s all about simple and fast. You should always avoid offering over 25% during this stage. Co-founder equity split - (US) Startup Market Data 45%/55% :. Learn more about how advisors help startups. Bringing decades of experience from startup, scale up, legal, entrepreneurship and fortune 500, we're on a mission to empower founders and their teams, by making global equity simple and fast, so they can go build a better future for all of us. By taking this course and utilizing my easy-to-use Startup Equity Calculator (UPDATED to handle up to 7 cofounder slots--more than what 99. 07M max to $1. Let’s assume that a company has a total of 10 million shares issued, and a founder holds 4 million shares while another holds 2. Those with a lighter, 10-hour-per-week commitment may receive closer to 5-10%. That 12. As you progress beyond this stage, you will have less equity to offer. DOWNLOAD the Template. They agree that the amount of capital that each invests in the venture will account for 50% of the equity split and they will divide the other 50% equally. Venture Capital Providers: 30 to 40 percent. by. Make better decisions, faster with an AI decision engine!The legal remedy was sought following recent controversial posts by Grover on social media. Download our startup equity calculator. Equity-based compensation plans often require smaller upfront costs than traditional forms of employee compensation, such as cash bonuses or salary increases. In this guide we go through important questions about startup equity for founders, employees and investors, including cap table management, splitting equity with your co-founders, common and preferred share classes, vesting schedules and employee equity compensation. The simplest way for founders to launch and run a startup:1. Founders Benefits: A fair distribution of stock amongst inventors encourages them to continue to be dedicated and active in the. The final results are helpful, but it’s the act of going through the process and asking yourself (and each other) the hard questions that truly pays off. At the time, Airbnb had a $200 million valuation. These days VCs teach the founders to be incredibly stingy to employees especially when it comes to equity. You can write from 2 to 5 different co-founders. A company starts out being 100% owned by the founders, meaning they hold 100% equity in the company. As a founder, the board of directors at your startup will have a statutory obligation to only offer shares or stock options to employees and advisors at what is known as “fair market value”. How to use the startup equity value calculator step by step? If you're a startup founder, equity is likely one of the most important things on your mind. Download the Grunt Fund Calculator – Expanded to accommodate up to 20 Grunts! The video below provide a quick explanation on using the calculator. With more conservative spending we managed to stay above 50% equity in the cap table. Below is. 1. Whether you've recently received an equity offer or already hold equity in a company, our calculator is here to provide you with a straightforward estimate of what your shares could be worth in different scenarios. Your analyst will then submit a draft 409A report in a few days. Fill in the number of options and strike. New Tax Law Improves Startup. is a web app for seed-stage founders designing ESOPs (Employee Stock Ownership Plans). Suppose a startup is raising $5 million in growth capital in an upcoming funding round. Tax benefits. Issuing equity to founders and employees in an LLC can be very complex to navigate for a startup. Equity Calculator; Equity Tables; Splitting Equity Between Founders; Further Reading; These startup resources are based on the book Hello, Startup: A Programmer's Guide to Building Products, Technologies, and Teams by. 1,572,495 new ESOP shares are made to ensure there is a 10% ESOP post the round. Churn Rate: The rate at which a startup loses customers during the acquisition process. The Co-Founder Equity Split Spreadsheet has 5 different calculators in it, and a final box that averages everything out among all 5. Want to know how you can split startup equity with the help of a startup equity calculator?Here, you would get a clear view of what type of data you need to. Salary replacement. Founders need to remember when it comes to valuation, everything is open to negotiation. Last week, Grover had posted on X platform (formerly Twitter) about the. com If you need to check how many shares each co-founder in your startup should get based on proven industry standards, use our startup equity calculator. 3. Apple’s initial equity split between its three co-founders, Steve Jobs, Steve Wozniak, and Ron Wayne, was 45/45/10. e. With each round of financing, where the startup gets more money from investors, the founders' ownership in the company shrinks. Self-Funding. 3. On day one, founders own 100%. Equity should be split equally because all the work is ahead of you. How to Determine the Right Amount of Equity for a Startup Employee. 2. Grow. The company has money, either from investors or from revenue, and they give you some of that money every month. As a result, the founders’ stake in the company is reduced; they can calculate equity dilution by taking the pre-money valuation and accounting for the equity they sold for the new capital. When a startup is initially formed, it will usually authorize 10,000,000 shares of common stock. However, for founders, there's a trade-off to consider. As a startup founder, keeping your company compliant is essential to protecting the value of your startup equity and reaping the rewards of your hard work. This increases the threshold for the calculations from $107,000 to $124,000, increases the lower Reg CF threshold for investors from $2,200 to $2,500, and increases certain thresholds on the 12-month amounts that issuers can raise (e. Although we find this tool to be of value to our clients, we do not sponsor its use or work directly with its developers. Co-founder Equity Split. Most founders can expect to give away at least 10 percent of their startup during the initial seed round. For example, the founder of a tech startup company may value the efforts placed towards developing the company at $200,000. This calculator shows how to determine a founder's equity dilution after a single round of fundraising/capital increase. The cost of capital calculator equates the cost of funds a startup raises to finance its growth. Use this simple Pre-Money and Post-Money startup Valuation Calculator by 100X. Summary. July 12th, 2022. Cost effective. Your job starts in. The number of shares available in the business is at the discretion of the founder or co-founders of the. Simply enter your information into the fields below, and the calculator will do the rest. Employers typically reserve 13% to 20% of equity for their employee option pool. In 2023, the average startup founder’s salary will be around $148,000 per year. Summary. On average, founders offer 10-20% of their equity during a seed round. In total, there are now 13,000 shares of company stock (on a fully diluted basis)—and just like that, you now own only 77% of your company (10,000/13,000) instead of 100%. Equity boundaries at different stages. 50/50 the. Venture Capital Providers: 30 to 40 percent. Research by SaaStr backs up this suggestion. Our startup equity calculator is designed to help quantify each of a startup’s co-founders’ contributions in order to more accurately split equity in the company so you can prevent disputes between team members and focus on what matters. Legal contracts can be costly and time-consuming, especially for busy startup founders. Then add up the numbers for each founder, sum those totals, and calculate the percentages. So, if you add shares to your company through subsequent rounds of funding, if you want to maintain the relative value of your. As a result, the equity share would be the contribution value divided by the company value, or 0. Use data to inform your decision making when creating equity offers for your team. Divide equity among company founders. FounderEquity •Founder Equity: Not a legal term but used in common parlance to refer to the shareholding (ownership) given to someone who participates in the initial creation and early stages of a startup. This is one of the simplest startup valuation methods. That means you and all your current and future colleagues will receive equity out of this pool. By that point, she had founded or cofounded several venture-backed startups (she’s up to five). Enter your business's name and industry. Download the Calculator. A SAFE and convertible note both allow for conversion into equity. Part-time co-founders typically commit between 10 to 30 hours per week. This first portion is known as the cliff. similar MRR growth, churn rates), and then use this as an anchor for your own value. A startup seeks funding from an investor who requests a 20% equity stake. Investor's equity (%) Pre-Money Valuation (₹). (according to Kruze Consulting) As a startup founder, you have many complex decisions to make—the trickiest one may be how to determine your salary. Look, starting a new venture is hard, but having to figure out what is fair for each cofounder shouldn't be. The list below shows founder or CEO ownership of 178 tech companies at IPO. Welcome to the Co-Founder Equity Calculator! It is based on almost 3 years of one-on-one discussions with entrepreneurs through the co-founders. This can be taken from similar job postings and the market as a whole. Automate your equity plan. This startup equity calculator can be used to help estimate the amount of equity each founder and investor receives. To build on the example, let’s say. The pitfall of giving more than 20% may not be. Create an employee stock option pool, or ESOP. The company contribution is rarely exactly 50/50 and the equity split should be based on a variety of factors, including those discussed above. Employees Carta’s Insights team deciphered the state of founder equity division by studying the data from 18,000 founders, across 8,000 startups actively using Carta software for their captables. [startup] founder is, put simply, the. she owns 63% of the startup's equity. So, if your company is valued at £1M, and you want to raise £200K, you’ll need to offer 20% equity in your business. Define the role you are looking to hire. We recommend keeping this allocation pretty minimal. It is a crucial factor that determines the value, incentives, and control of the company. On the other hand, convertible notes allow for conversion into the current round of shares or a future financing event where a. Build your company’s tech team, bringing on and managing new employees. At the beginning of a startup journey, founders own the full number of the startup's issued shares, with each. The risk of setting up a startup on your own . SeedCamp’s hackathon, Seedhack, took place at Google Campus, London, on the 8th to 10th of November. You can ask questions and iterate on the report with your analyst. Pitcherific: Pitcherific helps you create, train. VC to calculate how your round shapes up and how your dilution. This calculator shows how to determine a founder's equity dilution after a single round of fundraising/capital increase. The Pie Slicer. Equity is usually divided among founders, investors, employees and advisors. The initial allocation of this equity will be broken down into three groups: Founders will be allocated 8,000,000. Founders: 20 to 30 percent divided among co-founders. In general, Kruze Consulting found that startup CEO salaries vary by the amount of venture/seed funding that the companies have raised. Investor’s 20% is thus worth nothing. The founders startup calculator equity helps to calculate the value of your own founder equity split and help you allocate equity to all your founders, employees and partners. Many founders’ first inclination is to split equity evenly, or close to it—often times this comes out to simple splits like 50/50, 33/33/34, or 51/49. Some benchmark tools are: 1. Here is the formula Buffer uses to calculate equity and the percentage of the company each team member has the option to buy. Another method to calculate startup advisor equity compensation is the Guidelines method also known as the FAST agreement (Founder/Advisor Standard Template). CEO and Founder of Kruze Consulting. A number of factors, like startup resources, equities, the fund raised, sales made, etc. 1. Y Combinator famously advocates for equal split, and others provide calculators to split the equity "fairly". 5% to 2% stake for a key employee at the executive level. A typical (minimum) vesting schedule for a founder is 48 months with one-year cliff, but vesting. Take advantage of our free startup valuation calculator by answering the following 25 questions, and we’ll calculate an approximate valuation range. Type any values/percentages into the inputs, and the outputs will update. . Input the last preferred price, post-money valuation, and/or total number of outstanding shares from the companies you want to compare. A general rule of thumb is to set aside around 10%-15% of your equity for your. Startup equity can be given to founders, employees, and investors as both a reward and an incentive for contributing to the growth and success of the. Tech co-founder equity: Hiring a CTO is the right choice if you can afford tech salary and a fair amount of equity. Self-funding means that you independently provide the funding you need for your startup. With the FAST agreement, founders and advisors can agree on how to work together, what to accomplish, and the right amount of equity compensation in a short and simple 5-pager. Investing in C Corporations has major tax advantages for startup investors. If there are two founders or more, you may divide the founders shares in agreed-upon percentages (50/50, 50/30/20, 50/40/10,. Index VenturesOptionPlan. Drawbacks of Equal Splits. Equity Calculator for Equity in Start-up Companies. In my world, the non-founder equity pool is 20% max. A free tool from Capbase, makers of legal + financial software for startup founders. An operating system for your startup👨💻. One such method is the Founder’s Pie calculator. Here is a co-founder equity calculator that can help you through the process. 99% of you will need), you'll learn how to avoid this unfortunate, yet totally avoidable, situation. For example, if a worker is worth CAD 10000, and the share price is worth CAD 5, then the sweat equity, she will receive is CAD 50000. It’s almost never worth it to go to a startup vs faang unless the amount of equity is large, like single digit percentages. Median and average ownership were 9% and 11% respectively. Both single and double-trigger acceleration applies to the acceleration of vesting in case of acquisition. A founders’ agreement is a legal contract that clearly outlines the terms of your business partnership when you found a startup with a co-founder. By taking this course and utilizing my easy-to-use Startup Equity Calculator (UPDATED to handle up to 7 cofounder slots–more than what 99. Follow these steps to calculate a baseline valuation figure: Calculate your revenue run rate (RRR), which is the most recent month’s sales times 12. A cliff period means that during that period, no shares are owned by the person. Carta’s co-founder equity split tool is a dynamic tool that asks questions about the company and each founder—their roles, responsibilities, skill sets, and other factors—to model a recommended founder equity breakdown. The median level of founder ownership shown is 15% while the average is 20%. Equity ownership will be contingent on the company's valuation pre- or post-money. 0001. The. Equity refers to the percentage of the startup that someone owns, while shares refer to the number of units of capital that someone owns. Send Your pitches to us. The Startup Equity Calculator collects information on each of your co-founders’ roles and responsibilities, and proposes a fair equity split to make everyone happy. If there are five co-founders, each co-founder receives 20% equity in the company. The one big inevitable topic is ‘equity’, and YES, it can be uncomfortable among founders to talk frankly about it, especially in Thai culture. Let’s assume that the venture capitalist puts your company’s current value at $4 million (pre-money valuation) and decides to invest $2 million. Option pool: 20 percent, which can be divided up among. Share dilution can change both your financial stake in the company and how much control you have. Navigate to the “Calculator” tab in order to input your company’s data. 0% President / COO -Founder 100k-200k 175k 0-50k 3-8% 5. It represents a stake in the company's future success and potential financial gains. Also referred to as Founder Stock •Biggest question often faced by startups is allocating the equity among the Founders •Most. That’s where the traditional equity plan went wrong! Generally, founders enter into the fixed-equity-split agreements based on the predictions of the equation: Cofounder’s share % = The value of their contribution/The total value invested in the startup. According to Payscale, the average salary for startup employees stands at roughly $101,000 per year, with a range of $54,000 to $185,000. Whilst the factors in this equation are unique to. Angels can acquire a direct equity position, such as a 20% to 30% stake in the business. 7M from top-tier VCs and had 6 employees (4 founders & 2 others. Shake: Create, sign and send legally binding agreements in seconds. Part tool and tutorial, Sprout’s Co. It is a discount off the price per share. Studies show VCs prefer uneven splits, but startups still often split 50/50. Startup Equity Calculator. 2013. Down Round Protection. You input all the terms for your convertible note investors in this ledger. Early startup employees take on a lot of risk and deserve more upside in terms of startup equity & options. First you start with the founding — entering the total number of shares, each founder. Pro-tip: consider including language in the founders stock agreement. Determine the gap between their salary and total compensation. But, to stay on the well-trodden path to success, getting your finances and investments in order is essential. Examples are in there for demonstration purposes, create your own elements from scratch. Therefore you should continue to offer less equity in each subsequent round. 3. We did all the hard work for you and reviewed popular schools of thought on splitting equity and have boiled it down to what we believe is the most practical and direct way to calculate. Welcome to the Co-Founder Equity Calculator! It is based on almost 3 years of one-on-one discussions with entrepreneurs through the co-founders meetup and 10 editions of the silicon valley startup conference. Equity splits may be renegotiated down the line, especially at large stage funding events. Medicare - 1. Equity Calculator. If not, you need a system that will split equity fairly according to what each founder contributes. Docracy: An open collection of free legal documents. Angel Investors: 20 to 30 percent. By taking this course and utilizing my easy-to-use Startup Equity. Angel Investors: 20 to 30 percent. We are not a cap table startup; instead, we like to think of Slidebean as a fundraising OS for startup founders. A good cap table template seemed like a necessary addition. Preferred stock and common stock (alternatively preferred and common shares) are two classes of equity typically issued by startups as a security representing ownership in a company. We have founder equity as displayed in the table below. To use the Startup Equity Value Calculator, enter the company's stage of development, the amount of equity available, the valuation of the company, and the expected return on investment. Download the free calculator. In that case, the investor ends up losing their money. 25 and 1 percent equity in the business. By filing the 83(b) election within 30 days after you receive the. Ledgy takes care of it. But to create an effective option plan you need to know how much to award to each team member. Equity splits may be renegotiated down the line, especially at large stage funding events. Have traction? This next set of calculators helps you determine the. 3:07min. This introduction of new shares decreases the founders’ ownership stakes from 100% (100 shares/100 total shares) to 66% (100 shares/150 total shares). Let’s assume we allocate 30% towards initial contributions and 70% for future contributions. #2. I have been a solo founder. The amount of technical co-founder startup equity you should give members of your team depends on a few key factors. For this reason, it’s important to allocate the right amount of equity for your employee option pool. To calculate the churn rate, divide the number of customers you lost last quarter by the. Multiply each of the founder’s values by the factor’s value to calculate the scores. In this scenario, the Equity Calculator helps confirm that both co-founders have an equal equity share, each worth $750,000. Explore. Splitting startup equity. Co-Founder Equity Calculator which takes into considerations roles, contributions and risks: Foundr: Co-Founder Equity Calculator 2. Fair Equity Allocation. Experience of raising a round. The global SaaS platform for founding, operating, and investing in scalable, high growth companies. Initial Grant. 6 million. • Startup founders • Co-founders • Entrepreneurs So, you have a great business idea. Each co-founder needs to go to Startup Equity Calculator. As you might expect, technical co-founder equity should be reasonably high since they share the responsibility of running the. Founders need to be strategic on using people on your company’s advisory board, your reputation as a serial entrepreneur, previous work-history, I. they love you, and with some savvy negotiation, they invest for 10% equity. Previously Brad Feld has argued that a founder CEO will be in the 5-20% range, a founder CTO in the 2-10% range, other co-founders between 3-7% and non-founder. A simple agreement for future equity delays valuation of a company until it has more performance data on which to base a valuation. Advisors are an amazing part of the startup ecosystem. After all, equity is what allows you to attract and retain top talent, as well as provide incentives for employees to stay with your company for the long haul. Startup Equity Pie Calculator. The value of shares issued by a startup (or other company). A startup equity calculator is a simple tool that lets you enter the number of founders, their ownership percentage, and their capital contributions. Entrepreneurs know how important stock options are for hiring and retaining the best talent. To allow people to collaborate click the Share button (top right corner). Inputs that go into this model. A startup equity calculator can help you make equity projections and get a better understanding of your stock options. One major complicating factor with granting equity in an LLC is that W-2 employees of an LLC cannot hold equity in. The web app is based on Index’s analysis of seed-stage option grants, drawing on data from more than 1,000. Part 1. In the Silicon Valley Startup Attorney article, “Founders & Startup 101: I) Forms of Equity”, Chris Barsness outlines the most important terms that founders need to know in the world of startup equity and vesting. No early stage startup will be able to accurately. The effect of ESOP on ownership? Use the startup dilution calculator to understand impact of ESOP & VC on founders. This is mainly true for two-partner, 50-50 equity splits. ”. 5% equity. For this example, you divide 400,000 by 80% to get 500,000. Startup financial advisor David Ehrenberg suggests that 5 to 10 percent is a fair equity stake for CEOs who join the company later. g. Decide how much of their total compensation you would like to pay in cash (AKA their salary). excessive dilution, make sure the valuation cap isn’t too low. YOU PICK ME UP, AND I'LL DO THE SAME. Co-Founder 2 alone can not run the company and there is no equity left to hire new talent. The calculator allows for up to five investors and two co-founders. VoyageLA Founder and CEO, Mayank Bhandari, advises that the decision on whether to accept equity should be part and parcel of your decision to work at a startup. You should generally aim to reserve 10-15% of your total company equity for an employee stock option pool. 2. 25% equity stake. In the pre-seed and seed funding rounds, startups raise anywhere from $50,000 to $200,000 for a 5% to 10% equity stake.