Startup Equity Calculator - To Get Started

Welcome to the Co-Founder Equity Calculator! It is based on almost 3 years of one-on-one discussions with entrepreneurs through the co-founders meetup, the startup conference (the next one is May 14, 2015 in Redwood City) and advising various founders.

Fill out as many of the questions below as possible. If the question doesn't apply to your situation, leave the answer blank. For questions where selecting multiple founders is allowed, try to limit your selection to one or two founders, not everyone.

What this calculator doesn't do: it doesn't handle salaries, co-founders who invest significant cash, or co-founders who join long after the first version of a product has shipped.

For projects that are heavily design-oriented, it's ok to replace the questions about development by design, but keep in mind that you need developers as well.

This calculator is experimental. If you don't like the results, drop me an e-mail with details and I'll try to make improvements. Thanks!

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The Questions

Question
Who is the CEO?
Which founders are coding most of the site/app?
Who had the original idea and told the others?
If you could magically hire a few developers, would one of the founders become their manager, and if so, who?
Which founders are working part-time and will join full-time once you get funding
If this founder left, it would severely impact your chances of raising funding
If this founder left, your development schedule would be severely impacted
If this founder left, it would compromise your launch or initial traction
If this founder left, it would probably prevent us from generating revenue quickly
Who writes the blog and the marketing copy that goes on the site?
Who comes up with most of the features?
Who has a spreadsheet with budget estimates or simulations
So far, who pays for basic business expenses like printing business cards, web hosting?
Who pitches investors?
Who is well connected with your target industry, providing introductions to potential customers, journalists and influencers?

Suggested Equity

coLuncher: Silicon Valley Business Networking

FAQ

It sounds like a lot of equity to give away, what if a co-founder leaves?

The equity numbers assume a typical 4-year vesting for all founders including the CEO, with no cliff. It also assumes that no significant salary is provided to any of the co-founders (if that is wrong, you are entering into an employee relationship, not a co-founder relationship). If a founder leaves, vesting applies and they forfeit the shares that have not vested yet.

What does "You have a weak CEO" mean?

Having a "weak CEO" means that your CEO may not be getting their hands dirty enough to make the startup take-off. This typically occurs when the CEO is the "idea person" and expects others (such as the developers) to implement their vision.

What if I have been working on my project for a long time before considering co-founders?

The fact that a founder has been working on the project for significantly longer than others (one year or more) is not justification in itself for more equity. Instead, consider adjusting the vesting schedule.

We are 6 co-founders, can you add more columns to the calculator?

Actually, no. Most startups have one or two co-founders, total. A few have three. Usually, when people ask for 4, 5 6 or more co-founders, it's a sign that someone (the CEO) is not willing to make the hard decisions. Do you really think all 6 potential co-founders are critical to the success of the company? Try to be honest and separate the real co-founders from the friends who are happy to join for the ride.

One of the founders is putting all the money, but there is no place in the calculator to take it into account.

You should treat founders who put significant cash separately. Consider them as co-founders and fill out the questions ignoring the cash contribution. By the way, if most of their contribution is cash, they are not really co-founders, either they are investors who want to tell you how to run your business, or you are their cheap employee. Once you figured out how much equity their work deserves, do projections for a normal round of funding and see how much their cash would be worth.

Great, but how do I find a co-founder?

Read everything about how to find a cofounder here.