How To Use Equity As Fuel To Incentivize, Motivate, And Accelerate Growth

Programmable Equity — A New Framework For Co-Founder Equity Split

Equity can be the strongest motivation for building a strong team and your startup’s long-term success.

Equity represents the percentage of ownership in a startup. Founders, employees, and investors will own stake in a startup. At a typical venture capital-backed startup, the employee equity pool tends to fall somewhere between 10–20% of the total shares outstanding. Startups can offer equity to key hires or not at all. Deciding how to split the ownership and how much your Co-Founder gets can be very messy and challenging.

Frequently, Co-Founders don’t quite understand how much of a time commitment they have to give to the startup, primarily if it works. CEO’s must consider what the team wants even if they’re not thinking about their long-term interests. Y Combinator CEO and Partner, Michael Seibel, has said:

“I don’t want to create a situation where I have to motivate my Co-Founders every day. I want their equity stake in the company to be the thing that gets them to wake up in the middle of the night, gets them…