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Founders PiE – Distributing Equity Amongst Co-Founders

October15

One of the biggest issues that faces a lot of us especially first time entrepreneurs is dealing with the equity split amongst the founders. How much equity do we split amongst ourselves? Do we do an even split or is there some method to the madness. I believe ownership while potentially a confrontational issues has the ability to destroy the company if not dealt with appropriately and has to be taken head on right at the beginning of the journey. For me both as an investor and an entrepreneur it does boil down to how much skin in the game is the co founder bringing to the table. Is the founding member a fence sitter or someone who is actually willing to break his neck to see the venture succeed.

I came across this wonderful piece by Frank Demmler on “Cutting up the Founder’s Pie”. Frank has attempted and I must add an a great attempt at coming up with a formulae to help especially first time entrepreneurs in dealing with this equity split. By listing the crucial elements of every business that a founding member brings to the table and then by assigning weights to them based on the nature of the business. Frank develops a unique model to arrive at each of the founding team members equity split!

I strongly recommend reading the complete piece, although he adds caution by saying one should use this tool for guidance only and not too depend upon it exclusively!!!

Read the complete article by clicking here

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posted under Business Plans

This is a forum for entrepreneurs and professionals to connect, learn and grow with each other. The objective of this blog is to give you access to relevant resources, business opportunities and networking opportunities to enhance your entrepreneurial and professional lives.

About Author:

Digbijoy has a wide ranging experience across diverse sectors, initially started his career in education marketing with reputed educational institutes and then subsequently joined the advertising and events industry to execute several projects including a state election campaign for a national party, conceptualizing and running a restaurant chain in Delhi and several other projects.

He joined the Delhi chapter of The Indus Entrepreneurs (TiE Delhi), where he worked for over 3 years and drove various key initiatives like mentoring, deal flow, marketing, sponsorships etc and left his last position as Associate Director of the chapter in 2008 to pursue his entrepreneurial ambitions. He subsequently joined techTribe- India largest Career Networking platform where he served as director strategic relations and drove unique initiatives and partnerships for building and sustaining community engagement. Post techTribe he co founded an online supplemental education start-up – TenMarks Education INC. which was acquired by Amazon.com in October 2013.

Post TenMarks he lead Ennovent India as its country director which is an innovation accelerator. Ennovent provide services to accelerate innovations for sustainability in low-income markets in developing countries. It specializes in helping clients discover enterprises with novel solutions, develop business models to start-up enterprises, provide finance by facilitating early-stage investments and grow operations to scale profit and impact. Since 2008, Ennovent has worked with over 4,800 Network members, 15 Circle members and 10 Solution clients to accelerate over 80 innovations in 10 countries.

Currently Digbijoy Co-leads the Startup Program for Amazon Internet Services Pvt Ltd enabling the best startups leverage the power of cloud.

Lets Connect:-
Email: digbijoys@gmail.com
Linkedin: http://in.linkedin.com/in/digbijoy
Twitter: http://twitter.com/digbijoy

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