Equity is one of the most difficult decisions that must be made within a start-up. It is hard to place a value on the different skill sets and effort that each respective members of the organization puts in. The process of figuring this out isn’t a simple task where you can just decide without giving it some great thought and discussion.
Listening to Alex’s podcast on equity helped to confirm my thoughts on the very difficult decision that is made when splitting equity with co-founders. This is an important conversation with the co-founders of a company, that can begin with each party having completely different ideas of what the split should be, as we heard in Alex’s podcast. I think it is good to sometimes talk with an outside party and get their opinion on the topic, just as Alex did with his wife. This allows for the opinion from someone who has an understanding of the business, but one that is disconnected in terms of being discussed in receiving part equity.
Thinking about my particular skill set, I believe my best attributes are my people skills and my marketing skills, so I would look for co-founders that would complement my skill set. I have a decent understanding of financials and computer skills, so I would want to look for partners with accounting skills and graphic design skills. The idea of a thrift-consignment shop has been talked about with two of my close friends that graduated from here, one still local and one living in Miami. We would would split it up 40-30-30 to begin, with myself receiving the additional 10 % for originally founding the company and getting it started. This split is divided this way with the idea that everyone will be committing equal time and effort into their respective duties within the company. After some time, we could then re-evaluate the equity split if anyone cannot commit equal time and effort.
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