Adjust bootstrapped founder equity splits based on opportunity cost
Chad Wittman · Quick Way to Sell Your First Company For More Than $1m · Jan 19, 2016 · at 4:59
Chad Wittman, co-founder of EdgeRank Checker and Dolly, explains his framework for dividing founding equity among co-founders based on outside earning potential.
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“Let's start at 33% for each. And then how do we distribute it based on what else we could be doing? And so like my co-founder who was doing all the development, like he could have worked at, you know, Google or something or Facebook of that nature. And so it was like, okay, how do we shift that over to make sense for him? So we started at 33% each and then we adapted. And I think that's great for a small business model. When you start talking about VCs and series A that model changes a little bit.”
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