How much equity should you give a founding team?

Investors claim 20-30\% of startup shares, while founders should have over 60\% in total. You may also leave some available pool (5\%), but don’t forget to allocate 10\% to employees. Based on the most outstanding skills of co-founders, define your roles clearly within the company and assign job titles.

How Much Should Founders be paid?

After a substantial seed round, a typical founder salary is around $50K — $60K/year, or what is often called “ramen wages.” It’s not intended to do more than allow the founders to pay rent or the mortgage and a daily meal of instant noodles.

Should co founders get paid?

If you or your co-founder work full-time in your startup in exchange for equity, you might also be an employee and would likely have a written employment contract. Under the Fair Work Act 2009 (FWA), an employer must pay an employee at least the national minimum wage.

Should startup founders take a salary?

A good rule-of-thumb for founder salaries is $50,000 — $75,000. Somewhat higher salaries are acceptable in some cases, depending on the stage of the company and what its runway looks like. Anything six-figures is really not acceptable.

How many founding teams do you need for a startup?

The reason is that a founding team should be as lean as possible. Two is good because it allows you to distribute the necessary workload and trust is high. Three allows for more diversity of skill and specialized roles but introduces more opportunities for unnecessary drama.

Why is this the standard path for founder equity compensation?

There is a reason why this is is the standard, classic path for founder equity compensation. It perfectly aligns the incentives of founders with those of VC investors and their LPs: to maximize a company’s market value within a reasonable amount of time, and find the ideal opportunity to turn otherwise-illiquid shares into cash accordingly.

What is the role of a founder in an e-team?

For example, one team member may be likely to be the CEO, and one might be the CTO or possibly VP Engineering or Head of Creative. In other teams, however, a founder might play an initial key role, such as driving initial product development, but might not be a good fit for a near-term e-team role.

What should you do when someone comes on to your team?

Everybody who comes on to your team needs to start at the bottom and work their way up. What you should never have is somebody who comes on to the team brand new and say “ well I really believe in this person, so instead of compensating them like everybody else, I’m going to give them a little bit more.