Joel Spolsky, co-founder and CEO of our portfolio company Stack Exchange, posted an excellent answer to the question in the title of this post on the Stack site OnStartups.
I'm not going to reblog the entire answer here. I'd encourage you to go read Joel's answer. However, I am going to highlight some of the most important points from Joel's post:
* Fairness, and the perception of fairness, is much more valuable than owning a large stake.
* Before factoring in dilution from investors, the founders should end up with about 50% of the company, total. Each of the next five layers should end up with about 10% of the company, split equally among everyone in the layer. (go read Joel's answer to understand how he sets up these layers)
* It never makes sense to give anyone equity without vesting.
* Ideas are pretty much worthless.
* Nobody who is not working full time counts as a founder.
To read the full, original article click on this link: A VC: How To Allocate Founder and Employee Equity
Author: Fred Wilson
