Fog Creek boss Joel Spolsky how to distribute equity equity

the problem is so common that I’m going to give the world the most detailed answer to this question. I hope that in the future if someone asked a similar question, we just need to quote my answer.

1, the most important (equity allocation) principle.

fair, but also perceived fairness, more valuable than the real shares. In a startup, almost everything that can go wrong will go wrong, and the fault of the one of the biggest problems is huge, angry, loud among the founders on the "who work harder" argument was, who have more shares, who put forward ideas and so on.

This is

50-50 with a friend I will divide a stake in the new company, rather than stick to their own the equity of 60%, because this is my idea, "or" because I have more experience than you, or any other reason.

why? Because if I split the company 60-40, the company will in the US (the founder) constantly quarrel to failure! If you just say, "fuck it, we’ll never know the correct split, we still like that dude 50-50 split" you will continue to be friends and the company will survive.

so, I solemnly announced: Joel is recommended for any startup founder tips completely fair division equity


2, batch processing of ownership issues.

for simplicity, I will assume that you do not intend to take venture capital, and you will not have foreign investors. Then, I explain how to deal with venture capital, but now we temporarily assume no investors.

also for the sake of simplicity, we temporarily assume that the founders all quit their jobs, but also for the new company to work full-time. Later, I explain how to deal with the subsequent accession to the founder.


principle is this:

with the growth of your company, you will join the new staff one by one. The first employees of the company are the first founders (or the first founders). There may be 1, 2, or 3 or more, but you both start working for a new company and take the risk…… For example, quit your job to join a new company is not recognized by the market.

second batch of people coming in is the first (batch) real employees. When you hire a group of people, you have access to cash from a source (investors or customers, this does not matter). These people don’t need to take a lot of risks because they get paid on the first day of work, and, to be honest, they’re not the founders of the company, they’re working for a company.

The third installment of the

was later added to the employees. When they joined the company, the company was doing well.

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