Issues in Structuring Relationships Among Members of the Founder Team

http://web.mit.edu/e-club/hadzima/founders-memo.html

by Tichy • 19 years ago

11 6 19 years ago

web.mit.edu

pashle• 19 years ago

This memo is very enlightening!

I've just read a book where the author is a successful entrepreneur, but a greedy sod too. He stresses that ownership is not the important thing, but the ONLY thing that matters. Taking into account that he started up in the 70s and it wasn't a technology company, he got away with owning 100% of the company's equity - and still does today.

I've never heard of this happening: all the best technology companies (Google, Apple, Microsoft, Yahoo, HP etc.) split the equity at the very beginning fairly evenly.

Is this even possible today to own a company outright with web startups, or is it even a good idea?

nandan• 19 years ago

"Equity is like shit. If you pile it up, it just smells bad, but if you spread it around, wonderful things will grow." - Jerry Kaplan talking at Stanford

http://edcorner.stanford.edu/authorMaterialInfo.html?author=22

zaidf• 19 years ago

I think this is as hard as you make it. Only key for me when I start a venture with multiple people is how trustable and logical the partners are. That way you know if you ever have to re-do the ownership at any point, you might not get exactly what you want but you will still get something very close to fair.

pg• 19 years ago

I disagree that most ventures fail because of problems between founders. That is fairly common, but the commonest cause of failure is that the product is a dog.

brlewis• 19 years ago

This guy is a senior lecturer at Sloan, called his point "the reality" and even underlined it. You gotta admit when you're beat, pg.

Next you'll be saying founders' primary concern is whether the startup will survive, when the reality is that equity allocation is their primary concern. It's right there in the article.

davidcatalano• 19 years ago

Can't read the article but it sounds interesting

Issues in Structuring Relationships Among Members of the Founder Team

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