Dividing Ownership

Once you and your team have made the decision to create a startup, an early question is focused on how to divide the shares. The default answer is take the number of shares and divide by the number of founders. This implies that everyone to this point who is an owner of the startup contributed equally. This is rarely the case. While it may seem simple – later when real money is involved – this easy choice may lead to a lot of unhappiness.

Frank Demmler created a methodology and tool to address dividing the founder’s pie.

You may learn more here in this document explaining his process and access the calculator to help your startup divide company shares.

Also important is to develop an agreement on how, as the company grows, the founders and future employees will share in future allocations of equity.