Founder Equity Distribution Worksheet
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Founders often have very uncomfortable discussions around how much equity each should receive. Using a mutually agreed upon framework to inform this decision often helps reduce the emotional cost that often comes from disagreements about relative ownership.
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This is a SAMPLE worksheet that is intended to show how a group of founders might inform their initial equity distribution by rating themselves on specific criteria, as an alternative to making purely emotional arguments about how much each founder should receive.
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To use this worksheet, first emotionally prepare yourselves for an iterative process to arrive at a fair distribution for everyone.
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Determine which criteria make sense for your situation.
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Then rate each founder on each criteria on a scale from 1 - 5.
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Be open to the possibility that the math will not make sense, at first, or that the initial percentages based on the scores will be inaccurate. You might need to adjust the criteria and you will probably end up debating some of the scores.
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There is a natural, human tendency for each founder to want to use a framework that is advantageous to their own interests, which would be gaming the system. It's easy to say, "Don't do it" or "Try to be fair and look at the exercise from your co-founders' perspectives." If you aren't comfortable doing this on your own, one way to avoid this dynamic is to have a 3rd party, like an advisor, facilitate a discussion among your founding team to define the framework and rate each founder on each criteria.
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