How much equity should I give my startup company?

Understanding how option pools work and why they’ve been growing is critical, as they will affect dilution. Employee option pools can range from 5\% to 30\% of a startup’s equity, according to Carta data. Steinberg recommends establishing a pool of about 10\% for early key hires and 10\% for future employees.

How much do accelerators take?

However, the funds and guidance come at a price. Just like any other equity funding, signing an accelerator agreement typically means giving up a slice of your company. Startup accelerators generally take between 5\% and 10\% of your equity in exchange for training and a relatively small amount of funding.

How much employee equity should you offer your startup’s developers?

Leo Polovets of Susa Ventures suggests offering between 1\% and 2\% for a lead developer, based on data from Silicon Valley early-stage startups. Fred Wilson of Union Square ventures has posted an entire free, online class where he goes into great detail about structuring employee equity, which is definitely worth watching. What about advisors?

Should you offer contractors equity in Your Startup?

The graph below shows the relative percentage of equity holdings before, during, and after the investment. If you hire contractors in the early stages of your startup, you might be tempted to offer them equity in exchange for their services. While this sounds good because it can save you cash, it can actually be problematic.

How much unissued stock do investors need to purchase?

In conjunction with a fundraising event, your investors will typically require a +/- 10\% pool of unissued options be available after the funding. So let’s say that your investors are purchasing shares equal to 20\% of the company’s valuation.

How much value do unissued shares add to an option pool?

Typically, the unissued shares in your pool would account for somewhere between 10\% and 15\% of the post-money value (what your company is worth after investment closes). Let’s say that the shares you issue to your founding team represent 90\% of the value of the company, and you then create an option pool to which you assign 10\% of the value.