Early stage tech founders ask us all the time…
“How do I allocate founder equity and how do I think about incentivising my team with equity…?”
Shares, growth shares, flowering shares, options, EMI options, approved, unapproved, HMRC, employment related securities, vesting, leavers, etc etc.
The issues to consider are involved. And, alas, the issues do not scale down alongside the size of the company.
In fact, the opposite may be true. Getting the equity structure wrong at the outset may have a major negative influence on the company’s chances of succeeding. Fixing issues later on can also be eye-wateringly expensive, but the founders may have no option if fixing them is a condition to a VC investing. Occasionally, issues cannot be fixed at all.