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Early-stage Startups: How much should a veteran in one trade get in equity shareholding for helping a start-up establish a business in that particular trade?
LG
LG
Laurent Gibb, Clarity Expert On Growth Stage Startups answered:

Unfortunately, the answer is it depends. There are no fixed rules for assigning equity between you your 3 team mates.

You haven't said whether you will be working full time on this from the start, same for your colleagues and the roles each person will be doing so I will assume you are in my ranser.

Assuming they will be your cofounders each supporting with a key part of the business, taking the same risk by joining at the same time and sharing the load equitably then the answer is sharing 4 ways might make the most sense.

Split equity evenly and be done with it.

However, this isn’t the approach most startups use, because generally each founder/cofounder will contribute a different amount of money and/or time.

More than 50% of the time founders end up calling upon the law when it comes to equity distribution issues if things haven't been set-up fairly from the start.

The main cause behind these disputes is interpersonal conflicts because of questions about fairness. But it doesn't have to be this way.

If a 4-way split isn't the right option you may want to consider a method called the “dynamic split”or “slicing the pie” (https://slicingpie.com/) where instead of focusing on the unknown future, you determine your split based on what each co-founder is willing to invest now.

Good luck!

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