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Archives of #equity compensation

How Stock Options Work

Stock options make the most economical sense for larger startups with a relatively developed staff (senior management, rank-and-file, etc.). Since creating an options program is time intensive and requires highly specialized legal expertise, they’re quite costly to implement. Therefore, creating a stock options program for just one employee doesn’t justify the cost.   Here’s how […]

How Equity Should Be Split Between Founders, Employees, and Investors When Bootstrapped

Most equity splits are fixed. That means there’s a percentage of ownership that’s firmly allocated and not subject to change. Because of its rigid structure, it’s a minefield loaded with potentially explosive variables. For instance, it tends to lack the precision required to accurately weigh one person’s sweat equity against another’s financial contributions, especially as […]