Questions

I'm working on a tech product. I have incorporated a delaware corporation 2 weeks back. I wanted to file trademarks and patents under my company name. So I incorporated little bit early. I'm planning to bring more people like CTO, CFO, Advisors, Investors etc on board after 6 months. What would be the fair percentage of shares I should issue myself?

Hi there. First, congratulations on thinking ahead of the need...so many of the companies I work with are 'passion first' projects and they forget that ultimately, they're trying to build a company and need to think about that structure in the beginning.

It's my experience that founders should set aside about 20% of their total shares for an 'employee pool'. That leaves you with the balance and you can raise 3 rounds (F&F, Seed and A) before you'll be diluted below 50% (and there's a way to handle the voting control even lower than that).

As you bring on your C-level folks, they'll be awarded 3-5% vesting over a 3-4 year period with a 1 year cliff. That's reasonably a standard way to handle things but of course, every situation can be different.

Again, congrats on your desire to go for it and best of luck!

Brian Slawin
Portfolio Manager @ Ben Franklin Technology PArtners


Answered 8 years ago

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