Equity splits should reflect contributions and potential from "summary" of The Founder's Dilemmas by Noam Wasserman
Equity splits among founders are a critical issue that can have long-lasting implications for a startup. It is essential that these splits accurately reflect each founder's contributions and potential within the company. Founders often have different levels of expertise, experience, and resources to bring to the table. Therefore, it is crucial that the equity split acknowledges these differences and rewards each founder accordingly. When considering equity splits, founders must take into account not only the current contributions of each founder but also their potential future contributions. A founder who may have a smaller role in the company at present but has the potential to make significant contributions in the future should be rewarded with a larger share of equity. This approach ensures that each founder is incentivized to continue working hard and contributing to the success of the company over the long te...
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