Slice It Right: Dividing Startup Equity Without the Drama
- Stephanie Roulic
- 11 minutes ago
- 45 min read
Understanding how to structure and manage equity can make or break a startup’s future. Whether you’re dividing shares with co-founders, bringing on early hires, or preparing for your first funding round, equity decisions shape not only ownership - but alignment, trust and long-term growth.
In this session from Startup Boston Week 2025, our panel of founders and experts unpack the fundamentals of equity management: how to split equity fairly, design vesting schedules that work, manage advisors and early hires, and keep your cap table clean as you scale. You’ll also learn how early equity choices affect fundraising, control, and company culture down the line.
Featuring insights from:
Jason Freeman - CEO, Cone Technologies
Annie Garofalo - Team Dynamics Expert, Confidante
Anushka Singh - Founder & CEO, Kathalyst
5 Takeaways
1. Don’t Start with the Split — Start with the Relationship
Before diving into percentages, founders should test their working relationship. Garofalo emphasized treating the early phase like “co-founder dating,” using short-term trial periods to understand roles, communication styles, and trust. You don’t need to incorporate immediately - first, figure out if you actually work well together and whether the company has legs. Equity should follow relationship dynamics, not precede them.
2. Governance Comes Before Equity
Equity distribution should reflect roles, responsibilities, and decision-making structure, not arbitrary fairness. Define how decisions are made, who leads what, and what growth milestones look like before finalizing ownership. Garofalo noted that 50/50 splits aren’t automatically “fair,” and Freeman warned that without clarity, teams can confuse equality with equity. A well-defined governance plan helps prevent resentment and creates flexibility for adjustments as the company scales
3. Vesting Schedules Build Trust and Flexibility
Freeman shared that vesting schedules are essential not because of mistrust, but because they signal long-term commitment to investors and protect all parties. He recommended customizing vesting structures - for example, his latest company removed the typical one-year cliff after six months of co-founder “founder dating.” Garofalo added that early teams can use dynamic equity models like Slicing Pie, which allocates shares based on hours worked, cash invested, and milestones achieved before incorporation.
4. Keep Your Cap Table Clean (Investors Are Watching)
A messy cap table, with departed co-founders still holding large stakes or too many scattered angel investors, can be a major red flag for VCs. Both panelists stressed the importance of clarity and consolidation: use vesting to prevent “dead equity,” and consider vehicles like WeFunder to pool smaller checks under one entity. Investors evaluate whether your cap table works for or against you, and too much early clutter can land your company in what Freeman called the “hard pile” during due diligence
5. Equity Is Human, Treat It That Way
Perhaps the most powerful throughline was that equity isn’t just about numbers - it’s about relationships, trust, and shared purpose. Garofalo advised founders to create a “social contract” alongside legal documents, outlining expectations, exit plans, and how to handle conflict or life changes. Freeman echoed this, sharing how one co-founder’s preparation after his sudden passing helped the company survive, a reminder that equity planning is also about taking care of each other as humans
Key Quote Highlights
All five of these quotes are direct paraphrases or lightly cleaned for readability
“Don’t start the company with an equity split, start with conversations. You need to know if you can actually work together before you start dividing shares.” — Annie Garofalo
“Governance comes before equity. Equity should reflect how decisions are made and who’s accountable, not just what feels fair.” — Annie Garofalo
“A clean cap table tells investors your house is in order. A messy one can move you from the easy pile to the hard pile during diligence.” — Jason Freeman
“Vesting isn’t about mistrust, it’s about alignment. It says, ‘we’re in this together for the long haul.’” — Jason Freeman
“Equity is human. It’s not just a number on a spreadsheet, it’s about relationships, expectations, and how we take care of each other when things change.” — Anushka Singh
Parting Thoughts, Video & Transcript
The conversation around equity wasn’t just about numbers, it was about building companies that last. The panelists reminded founders that clear communication, structured agreements, and mutual respect are the real foundations of equity. Whether you’re just starting out or restructuring your cap table, how you handle these conversations sets the tone for everything that follows - your culture, your investor relationships, and your ability to grow sustainably.
At Startup Boston, we believe these are exactly the kinds of honest, practical discussions that strengthen our startup community, helping founders across New England build not only smarter companies, but stronger partnerships.
Full Transcript Below
Want to revisit a particular quote or share with a teammate? We’ve got you covered. Read the transcript here:
Anushka Singh
[ 00:02:25,500 ] Thank you. Hi, everyone. My name is Anushka. Welcome. I hope you all had a great lunch and are excited to get started. Today's panel is Slice It Right: Dividing Startup Equity Without the Drama. I would argue probably the most important panel of the entire week, having the most long-lasting repercussions. So my recommendation to all of you is: we have a 15-minute Q&A at the end. Ask all the questions that you might have. Small, big, does not matter. There's no question that's too dumb or too far off. We have some great, knowledgeable panelists here. Use their expertise while you have them. And another small recommendation: if you have a paper and pen with you, please take handwritten notes, because you might forget some of the stuff and it will come in handy. Now, that being said, I would like our panelists to quickly introduce themselves because they can do a better introduction than I could ever do.
Annie Garofalo
[ 00:03:28,250 ] Hi, everyone. I'm Annie Garofalo. I specialize in co-founder relationships. So what I do, my practice kind of provides premarital counseling to co-founders, not married co-founders, just every kind of co-founder. It's a very intense relationship. And so I apply couples therapy principles to people starting companies together. A bit about my background. So I started my first company almost 10 years ago with one of my closest childhood friends.
Annie Garofalo
[ 00:03:57,410 ] We moved to Guatemala. I don't speak Spanish. There were a lot of hurdles. That we had to overcome and surprisingly, the hardest one was our relationship, which is what got me focused in the space I went to Stanford to study my MBA and a Master's in Sociology, specifically looking at how to apply these couples therapy principles and communication frameworks to this really intense relationship in the entrepreneurial ecosystem. So I've now been doing that for about five years and I'm excited to share. A bit about what the research says and ideal ways to have some of these harder conversations as you're establishing your company or thinking about establishing a company.
Jason Freeman
[ 00:04:41,930 ] I love that.
Jason Freeman
[ 00:04:43,990 ] Couples counseling for startups. Hi, my name is Jason Freeman. I've been an entrepreneur now for over 15 years. I've been lucky enough to work on with some great co-founding teams where we had to deal with a lot of these challenges.
Jason Freeman
[ 00:04:58,780 ] My first three startups went to exit, all three strategic.
Jason Freeman
[ 00:05:03,080 ] And then I'm, surprisingly, I'm in for another fourth one right now, which we're... We're making progress rapidly, and I have a really great co-founder, again, dealing with lots of these challenges. I also encounter these problems as a mentor and advisor, formal advisor. So I'm a Techstars all-star mentor, but I'm also a mentor for the Harvard iLab and for Startup Boston. and an advisor for some just great companies. But everybody's dealing with this stuff, so excited to chat about it today.
Anushka Singh
[ 00:05:34,490 ] All right. Thank you so much. It's amazing to have you guys here. I'm going to start with probably the burning question and the most important questions right off the bat, which is what are some of the best practices for ensuring an equitable distribution of ownership amongst co-founders? Jason, can you start? Oh, sure.
Jason Freeman
[ 00:05:54,050 ] yeah i mean i think a best practice is starting off with knowing yourself knowing what you're bringing to the table so i think a little self-reflection is not a little a lot of self-reflection is really important you're going to approach a huge problem So when you're at an investor give me this this criteria around an investable company, so the first thing they said was is the problem big enough right if it's a huge problem, you know there's potentially a huge market to go there.
Jason Freeman
[ 00:06:28,380 ] Is the solution somewhat feasible.
Jason Freeman
[ 00:06:31,510 ] yeah okay makes sense you know they know the solution is going to change but then he said something that i don't think i'll ever forget is does the founding team have an unfair advantage And so what makes you, as a contributing founding team member, to say, yes, I have this unfair advantage? That brings a ton of value to this table. How are we going to identify that value, respect that value I'm going to bring to the table? and um make sure that there's you know that it's recognized through an equity contribution for let's say so i'd say the first best practice is know yourself and then also be a good study of the people you're going to be working with because it's really important yeah and do you want to take that yeah Just to add to that, I would say a best practice I recommend to mentees is not to jump straight into the equity conversation, but to...
Annie Garofalo
[ 00:07:26,040 ] creatively test each other out as co-founders and also test out the viability of your company if the first conversation you have is about equity splits you're going in without much information you don't know how long the company has legs for. You don't probably have product market fit. You maybe haven't worked with this co-founder before. That's a lot of information to collect. And you don't need to incorporate a company in order to gather more information about the decision you're making and moving forward.
Annie Garofalo
[ 00:07:55,730 ] So I would say in lieu of having the conversation start with are we 50-50 instead figure out a way to have a trial period where you're clear on if you don't end up working together what is your ownership like who owns the company and who kind of steps away and having all these conversations upfront with these shorter chapters. Like right off the bat, your chapter's not gonna be a seven to 10 year exit. You need to figure out, you need to break that down into much smaller chunks of time.
Annie Garofalo
[ 00:08:28,080 ] and that is especially important for students. So I often work with students and being able to use graduation as a milestone, and you probably don't want any equity divest before that, so. We can get into the logistics of it, but I'd say my biggest best practice is not to jump into this as the first conversation. It should be one of the final conversations of that initial chapter.
Anushka Singh
[ 00:08:51,010 ] So, that being said, about, you know, equity distribution, can you guys talk a little bit about what is the real-world impact of an equity distribution? Like, co-founders, whether it comes to decision-making or, like, navigating roles and responsibilities, how does an equity distribution affect that? And I'll have Annie go first.
Annie Garofalo
[ 00:09:11,950 ] Well, I have kind of a hot take. I think equity distribution is important, but it should be a representation of your roles and responsibility, and governance structure. You should define that first. Then, have the equity distribution follow that, and that the way that you define your governance structure, roles, and responsibilities should happen through conversations over time. How, yeah, the ownership structure is just like a numbers way of bringing those decisions to life. And they... they can also be tweaked. One of the biggest misconceptions I see is that if you kind of create like a pool at the beginning or how you do your initial equity distribution. There's ways to delineate a portion of your shares, but allow other shares so that you can more flexibly change your ownership structure in the future.
Annie Garofalo
[ 00:10:15,460 ] without having to add more shares. So these, again, are getting into the logistics of it. There's a more logistical panel with lawyers, I believe, later this afternoon. But my point is, one, start with those conversations of governance, structure, roles, and responsibilities.
Annie Garofalo
[ 00:10:31,640 ] and create a path to make sure that you and your co-founders are able to scale with the company, that you have the right skill sets to do that, that you're able to be really good managers. Um, before you make those decisions, and if you've already made that equity distribution decision and realize that maybe one of you isn't the right person to scale that company, there are ways to rearrange, as long as you put that structure in place up front.
Jason Freeman
[ 00:10:59,130 ] Well said. I think that word distribution is really interesting because if you're building a company that scales, the equity is really not distributed to you yet. So, if you're going to get investments, you're hopefully going to get legal counsel and advice around that. This equity should be vesting over time, even for those, especially for those co-founders, who I had another investor tell me, Jason, you don't realize the power you have in your feet. If you walked away, almost the entire value of this company disappears overnight. We had a very, very close relationship at that time. He was my lead investor, but we would go to lunch weekly together. So he was really investing in me, and he told me the truth about that in terms of... A lot of entrepreneurs don't realize how much power they have in their feet. So my point is that if you're building this company to scale, if you're building it to do something really great, there is what's going to be called a vesting schedule and how you're getting this equity compensation.
Jason Freeman
[ 00:12:00,200 ] And there's lots of ways to think about a vesting schedule. And a lot of the ways that I think about it are probably contrarian to a lot of advice or maybe direction you might get. So I don't know if it would be helpful to talk about some of those things. So maybe a little bit of a contrarian view, like I'm founding my fourth company right now.
Jason Freeman
[ 00:12:20,010 ] My co-founder and I made a decision that we were going to have vesting on our, what's called, so another term maybe to look up is founder stock, but we were going to have vesting on that, and we were getting counsel around like, well, would you build in another Google term, a cliff into that vesting, and basically what a cliff is. is if your stock is getting allocated to you over a period of time, let's say four years, if it's getting allocated monthly, then that monthly allocation, it's adding up, but you can't actually have access to it until at least a year passes. Right. So that's called a cliff. And we decided not to actually have a cliff in our vesting schedule. And the reason I gave to our legal counsel is we've done our founder dating for six months now. We've been talking it through deeply for six months now before we're even trying to bring something to market.
Jason Freeman
[ 00:13:16,480 ] And I know at this point that the only reason my co-founder is leaving is if it's some major life event. So I know I'm going to be calling you at that point anyway, saying, 'Let's get him his vested stock anyway.'
Jason Freeman
[ 00:13:28,960 ] That's the only reason he's walking away from this at this point. So why am I going to build that in? Let's start off from a trust but verify. Like the stock is vested, right? But we don't need a one-year cliff. If for some reason a life happens, we're both. fathers of young children like life happens right and so that's one example of like i wouldn't call it a distribution like this is a very complex thought process and a lot of it has to go into a lot of trust in your your co
Anushka Singh
[ 00:13:56,270 ]-founder um i don't want to not like i can think of another example too is that okay yeah or do you want me to save it let's save it for another okay because i yeah um i just wanted to so You actually answered my next question, which was around vesting schedules and how to use them effectively in an early stage relationship. So I just wanted to hear a different point of view. Annie, if you have seen vesting schedules, how different founders have used them. Maybe some situations where it might not have gone right. Yeah, yeah.
Annie Garofalo
[ 00:14:30,880 ] I um, and so for those of you who are new to vesting schedules, I looked up what's like the most regular of the schedules and it's the most common is a four-year vesting schedule where it accrues at a certain point with a one-year cliff. So that's what's typical. I would say that's not necessarily what you should do, but that's just so we can all level set on what's true. Um, and that is that happens at some point post incorporation or post fundraise. So I am less—uh— the teams that I typically work with are either already kind of have that distributed or not distributed, but that arrangement set up or they're pre-incorporation or pre-fundraising. So I might take the question in like a little bit of a different area, which is how do you have this conversation where you want to be building that trust or be kind of co-founder dating without having these legal documents binding you to some schedule.
Annie Garofalo
[ 00:15:32,940 ] And one platform that I highly recommend is called Slicing Pie. And the way they dynamically split equity over the course of time. is by accruing it based on your hours that you put into the company. So the platform itself will create a slice per person, whether it's co-founder or maybe advisor or early team member. and it will distribute this equity based on things like your market rate or how much cash you've put into the company and things like that. So the platform handles that for you. And then, once you... incorporate or raise a funding round that pie freezes and then it becomes enforceable, like you can pay them out or they become like a portion of the capital table once you have investors. This is just a really creative way to kind of compensate people for their worth, but also say you'll only get paid if this succeeds, which is also a good incentive alignment. It means that you don't have to pay them out of pocket and that everyone gets paid out when there is a successful outcome or a successful milestone.
Annie Garofalo
[ 00:16:41,180 ] So again, that's called slicing pie, and the principle there is dynamic equity splits. All right.
Anushka Singh
[ 00:16:46,940 ] Thank you. Um, I just wanted to shift gears a little bit. So we spoke. Can I talk a little bit more about vesting? Is that okay? Yeah, yeah, okay. Do you mind? No, no, please go ahead. We have a few stories.
Jason Freeman
[ 00:16:58,210 ] Oh, the second story, yes, exactly. Yeah, so the other thing to consider about vesting schedules is not just for the early founding team, like the co-founders, let's call them, but also for your early employees. And so that vesting schedule, it usually tends to be allocated towards around a different type of stock, which is called options. And options are really interesting because they are basically a promise to be able to buy a stock at a very, very low price in the future.
Jason Freeman
[ 00:17:31,200 ] You're pricing an option early, and then hopefully the stock that it's associated with sells for a lot of money later, and you make up the difference as a founding team member. And so another thing I, perhaps, have a contrarian view around options that I've that I've come to understand for myself is my first startup was a fairly quick exit. And so I've had that in my mind of my earliest team. Do I want to incentivize them around this idea of a quick exit, like potentially if it can work out? And so that early team not only deals with their cliff, but they might deal with other restrictions on being able to exercise their options. And so one of the things is something called a trigger. So if a company's sales team, let's say, the acquirer of that company doesn't want to retain that employee, that early employee, and they decide that they're going to potentially lay them off. Well, maybe that employee has what's called a double trigger built into their vesting schedule.
Jason Freeman
[ 00:18:33,170 ] So that way, they're not left in the cold. They've done all this work, but we just happen to sell the day before their cliff. So these are things where you're thinking about questions of fairness, questions of how do we want to incentivize towards the type of growth we want. That's what I'm thinking about vesting. And then I tend to have accumulated maybe some contrarian views around this concept.
Anushka Singh
[ 00:18:53,660 ] So you just took away my next question, which was around strategies that founders can use to allocate and manage equity for early team, advisors, and investors. So you mentioned a great point about early teams, which is the ESOPs, the employee stock option pool.
Anushka Singh
[ 00:19:14,800 ] I'll just ask Jason about this. How would you manage equity for early advisors and early investors?
Jason Freeman
[ 00:19:21,340 ] Yeah, I mean, this is a really important question.
Jason Freeman
[ 00:19:26,380 ] I can give you an example of I'm kind of dealing with right now.
Jason Freeman
[ 00:19:31,930 ] What happens a lot of times in the early stages, especially if you're going to raise money, is your earliest investors, let's say they're angels, will often be very strategic. And so they kind of are like, is this an advisor? Is this a mentor? Is this an early investor? They're often like wearing all three hats for you. And I'm experiencing the really good problem to have right now where one of our earliest strategic investors, she is just on fire for our company right now and is doing so much to try to get in front of things. And I'm like... really should we be compensating as a formal advisor for her in this case? So it's like you're thinking through who's gonna accelerate the business and how do you incentivize them for the upside around that?
Jason Freeman
[ 00:20:15,710 ] Yeah, it's really interesting. A lot of this has to do with timing too because options are only valuable if they get priced early enough does that make sense does the concept make sense and so it only is is is an incentive for them if we can price it early enough in the company's history to make it pay off later when it sells for hopefully a bajillion dollars right So these are important questions. It's like pricing them early for your advisors. It can be a really, like, you would think.
Jason Freeman
[ 00:20:47,340 ] Well, I don't have the money to go out and pay for the process of pricing those options out. Maybe a term that's going to be in that later panel is a 409A valuation. That's how you can price an option.
Jason Freeman
[ 00:20:59,409 ] um but you're like that costs money but maybe like because you've priced your options so early you can incentivize these like incredible advisors to come onto your advisory board because you've yeah it's really cheap yeah so did that answer It did, it did.
Anushka Singh
[ 00:21:14,370 ] I just wanted to, for anybody who doesn't know how options work and how stock and all works, why it's important to price it early and get stock at a lower price is because... When you assign options to somebody, they don't actually own the stock. It's just like an assignment on paper. Let's say, if you bought options when the stock price was like one cent. And you bought 10 options. Let's say, two years later, the company is selling for a billion dollars, and one stock is worth $100. For you to get that difference and that equity, you'll actually have to pay the amount that the price of the option when it was assigned to you. So, if it was assigned at $0. 01, then if you have 10 shares, you would have to pay $0. 10 to get that valuation change. If it was assigned much later on, and let's say the value of the share was $10, you would have to pay $100 and things like that.
Anushka Singh
[ 00:22:16,350 ] when to actually get the equity assigned to you um to get the stocks assigned to you you have to pay the amount um of when like whenever you bought that those option pools so that's why getting it early is important because you get it cheaper and then if you have a larger exit that's a you know much bigger gain for you from from an investment point of view I hope I explained that right. If I didn't, please stop.
Jason Freeman
[ 00:22:40,550 ] The whole game is basically, can you attract really great talent early?
Anushka Singh
[ 00:22:44,290 ] Yeah, yeah.
Jason Freeman
[ 00:22:45,130 ] And you incentivize them by saying, our stock is really cheap right now, but you see all this great, great potential in us, of course, right? We're going to rule the world. And so get in with us early, and we're going to take care of you because we understand this. And I think this gives me maybe a little bit of an advantage as an entrepreneur is I'm thinking about that so early. And I make sure that advisors and employees know I'm thinking about that. I'm trying to make sure I'm looking out for you in that process.
Anushka Singh
[ 00:23:13,430 ] Annie, do you have any recommendations on early advisors, early team, how do you manage equity distribution?
Annie Garofalo
[ 00:23:19,890 ] I was thinking about this example, which happens a fair bit, where there are two co-founders. Let's say they meet as students, and one has an offer to kind of join a larger corporation after school but wants to keep working on the startup while the other person is working full time on the startup. So I think there is this.
Annie Garofalo
[ 00:23:42,900 ] kind of like co-founder advisory role that that opens up um at a lot of different milestones but particularly for students who are graduating and have one has a job offer one wants to do this full-time um and there's just i've seen a number of creative ways to whether it's adjusting your vesting schedule and actually pausing the vesting as a co-founder and starting a different advisory contract similar to what you had mentioned. That can often feel more fair. but i i guess i just wanted to name that dynamic that can happen and um using this as a like that's aligning the right incentives and is also mapped to the the hours that someone's putting in the risk that they're taking the role that they're playing at the company So even if they have that co-founder title, but they're only plugging in as an advisor, that kind of schedule and equity arrangement looks different than if they were a full-time co-founder. So I guess that's the only thing I would add to that.
Anushka Singh
[ 00:24:45,590 ] Okay, let's shift gears a little bit. What are some common mistakes that you see founders make with their early cap tables?
Jason Freeman
[ 00:24:54,900 ] I didn't jump the gun on this one.
Anushka Singh
[ 00:24:57,500 ] Yes.
Jason Freeman
[ 00:24:59,800 ] Did you want to start?
Annie Garofalo
[ 00:25:00,560 ] No, go ahead.
Jason Freeman
[ 00:25:01,300 ] Please go ahead. So common mistakes on the cap table.
Jason Freeman
[ 00:25:05,900 ] I think a common mistake is to not think about your cap table.
Jason Freeman
[ 00:25:10,890 ] And what I mean by that is so much of if you're going to go get investment is about signaling to investors. So I had a friend recently, he's a really experienced entrepreneur who's going back to fundraising again. He's like... And he had to have this refreshed in his mind. He's like, I went to a top tier VC and he's like, I have the easy pile and I have the hard pile. And so the hard pile is usually cap table driven. Like there's some weird thing that's happened with the co-founders. Somebody's left, but still has a huge share of the company.
Jason Freeman
[ 00:25:46,140 ] And so again, why vesting schedules are so helpful. It's not because I don't trust you. It's because we also have to signal to the world that we're serious about this and that we're in it for the longer game, right? And so not thinking about your cap table, thinking you're entitled to those shares as a distribution so early, it'd be a mistake. right not not not building that that into your um the way that you're gonna to to see your own contribution but the people around you holding them to the same accountability and standard I think this is a tricky one because it can really work too, but having a ton of angels on your cap table early can be really tricky. And if they're strategic, then great, awesome. But if they're not, if it was about the capital you needed at the time, like... How does that work out? And I'm not saying it can't work. It definitely can't work, but maybe it's starting to get into the hard pile. Yeah.
Anushka Singh
[ 00:26:46,210 ] Do you mean like an SPV or like multiple angels, like multiple people on your board and things like that?
Jason Freeman
[ 00:26:52,500 ] No, I meant like multiple angels that have invested in you. Okay, got it. Yeah, and I mean, that's fine. It's just like, you start to reach a certain point where they're like, 'Well, where's your priced round? Where's your—' and so it's just a signal. It doesn't mean it's wrong. So I wouldn't say it's a mistake, but it's like, what do you want to be signaling if you're going to go raise outside capital? Yeah.
Anushka Singh
[ 00:27:14,390 ] I will add one thing. A lot of, not all investors do this, but at some point, if people are— investors and angels— are coming in early on your cap table. They might ask for board seats and voting rights and things like that on board decisions. That can become very complex. I don't know if you have any stories or something to share on that.
Jason Freeman
[ 00:27:36,330 ] I mean, your board— you basically are married to them. You better know who's on your board because that can cause dramatic issues for you. I've experienced it where I was misaligned with one of the board members, and it was really challenging, incredibly challenging. So, yes, that's an issue.
Jason Freeman
[ 00:27:56,620 ] Yes.
Anushka Singh
[ 00:27:57,060 ] So scrutinize your board members as hard as you would scrutinize a co-founder?
Jason Freeman
[ 00:28:01,689 ] Yes. You won't be able to vet them as far because you're not going to have a working relationship.
Jason Freeman
[ 00:28:08,750 ] You're not going to get the founder date in the same way.
Jason Freeman
[ 00:28:12,170 ] Something that can help is: are they continuing to invest?
Jason Freeman
[ 00:28:18,060 ] That's a nice litmus test. If they're not investing anymore, should they really be on your board?
Annie Garofalo
[ 00:28:24,640 ] Do you have any horror stories? I mean, not horror stories. I think maybe like a misconception. Yeah, a misconception that I often see, especially in teams where they get really stuck or gridlocked on this.
Annie Garofalo
[ 00:28:41,010 ] equity distribution is the belief that being equal in equity means that you're kind of operating in a fair way and that's not i've seen teams where they're 50 50 equity split but one co-founder is the one that makes all the decisions and the other one doesn't feel like they're in a fair work environment and in places where maybe there's a 40 60 split but the 60 co-founder is all about consensus driven decision making and so brings that person in as a 50 50 decision maker um so i guess i just want to emphasize that the work culture in the company is not necessarily like what is shown up on the cap table and so you really do need to do research on both sides of of that um and know be self-aware like your first point be self-aware about what is the kind of decision-making practice that you want in your company and yeah just make sure that that's happening because
Annie Garofalo
[ 00:29:41,540 ] just because you have a 50 50 equity split or just because you're the minority um equity owner it doesn't mean that you'll be expected to show up and i like just don't make assumptions on what that means about your role in the company um and maybe i'd have like one other thought about the kind of what I've seen be challenging is when teams don't have like a social contract so a lot of lawyers will will put together kind of a governance structure document and a lot of like an operating agreement and things like that and Usually those are default because it is expensive to hire lawyers and make those changes, So it makes sense to do a default agreement legally. I would also encourage founders to really look at those and create almost a handshake social contract where they write down things like, what happens if one of us leaves? Not just on the equity cap table side of things, but also in terms of how we want to treat each other.
Annie Garofalo
[ 00:30:41,960 ] What does that look like if it's a departure due to a strategic disagreement or it's just no longer a good fit? Kind of company fit what does that look like? If there's a life circumstance that that you have to leave the company or take a break, like, how much notice do you need to give? Ideally, hope to give? What does the transition plan look like? And just plan for the worst? I a lot of founders don't like to do that— they feel like it's jinxing where they're going, but trust me: if that worst-case scenario happens, you have much more likely of a like a much more likely to succeed and continue having your company than if you don't have those conversations. That happens, and that happens that decreases the likelihood of success after that scenario. So I guess those, I'll say those.
Jason Freeman
[ 00:31:28,150 ] I just really appreciate what you said because I know like a lot of the things we're talking about feel maybe technical, but this is really a very human choice right now. And I can give you an example where this really hit me. It was on my first startup. Um, the our lead um engineer on that startup, who was by far the most experienced business person on our team, passed away suddenly. And the rest of our founding team is like, 'Oh no, what are we going to do now?' And we had already sold hundreds of thousands of dollars in pre-sales for a product that wasn't even on the market yet. And so it was this moment where we were just in shock. And then we realized, because he had done so much of the homework and the legal work to set up, in case of a scenario where one of us had to exit the company or a life tragedy happens, where like we had all of the documentation in place to move forward and i felt like he was like taking care of us even
Jason Freeman
[ 00:32:29,530 ] beyond like his life that was a really powerful moment and like one that i try to model now i'm like how do i do this because we all are human we all i can you know we will perish from this world and we hopefully leave behind a legacy of we made the people in our lives lives better not not worse and so that's when you were saying that that social contract i feel like he was living up to that social contract when he was doing the due diligence of like what happens if one of us The company just kept going and really going well. We felt like it was also in service to his memory, but because he had done that incredible pre-work.
Anushka Singh
[ 00:33:11,590 ] No, even I've had first-hand experience with that. Technically, even my current startup, but we were doing a different idea back then. It had come to the point where I was with two of my friends, and it had become so... The tension between us had become so...
Anushka Singh
[ 00:33:29,690 ] high that it was about like are we saving the professional relationship or are we saving the friendship because both could not survive at the same time and You know it was it was a hard decision But you know we decided to save the friendship rather than the professional relationship and have a breakup of founders back then So definitely, we did not have the conversations. We did not have a social contract. I went through that. I had like two months of slump where I wasn't even sure if the friendship was alive.
Anushka Singh
[ 00:33:58,579 ] Yeah, having those conversations early, definitely a good idea.
Anushka Singh
[ 00:34:03,800 ] I know we don't have an investor on our panel yet, but both of you all work very closely with investors and have taken investment.
Anushka Singh
[ 00:34:13,179 ] So I just wanted to get, according to you, what's the investor perspective and how do they view like early equity distributions? How much are they expecting and then what are some red flags that they see amongst founders?
Annie Garofalo
[ 00:34:30,230 ] The biggest thing that I've heard from investors is maintaining a clean cap table. And I don't know the exact nitty gritty of what that means. I think I've seen some scenarios where maybe there has been a departing co-founder who has left the company but still holds over 10% of the company's equity. and that um i think they call that what do they call i don't know what they call that something they call that something like dead equity maybe i don't i don't know but it's um something that they will then go back and like try and have you go talk to that that previous co-founder and try to figure out a way to get them to own minimal shares or like buy a bag or whatever that looks like. But a rearrangement of the cap table and that just can take a lot of energy and resources. So that's the extent of my knowledge on cap tables from an investor perspective, I'd say.
Jason Freeman
[ 00:35:25,700 ] Yeah, I mean, I don't know if an investor would say it this way, but how I think about it on their behalf is, does this cap table work for us or work against us?
Jason Freeman
[ 00:35:35,110 ] like is this money especially if like the the even the angels the strategic angels are following on are they like doubling tripling their investment you can see the trajectory they're like oh they actually believe in this When you have that feeling of a strategic angel who comes back and they just tell you they're tripling their investment, you're like, okay, that's a signal. This is happening. Of course, investors are human. They're going to feel that, too. They're going to feel the excitement around that. They're like, oh, other people are getting really excited about this. So is the cap table working for you, if your cap table has a big contingent of that debt equity, you know, it's kind of not a nice term, but that equity that is not going to work for you right now, that's another signal that maybe moves you towards the difficult pile, not the easy pile.
Annie Garofalo
[ 00:36:24,250 ] And I think building on what you were saying earlier, too, about having like a lot of angel investors, just having multiple names on that cap table can be really challenging. One workaround I've seen lately is WeFunder, which is like an angel investing kind of crowdsourcing platform. So that you can take money from a lot of individuals, but it's listed on your cap table as just one, as WeFunder, as just like the one contributor. So that's one way to maintain a clean cap table while also being able to have a lot of people put in smaller check sizes to get you to where you need to be.
Anushka Singh
[ 00:36:56,930 ] All right. So I think one thing that we all can agree with, if a company is doing really well, Equity cap table is kind of like a, well, the problems with equity and cap table don't show up as often, but it becomes a problem, especially if you're doing a down round or if your valuation of the company has gone down. from like, let's say, from where you started or where you assigned certain shares. Do you guys have any recommendations to founders if they're going through that? What should they look out for or what should they avoid to not get into that situation?
Jason Freeman
[ 00:37:31,960 ] Yeah, I mean, I have experienced that scenario. It's very challenging.
Jason Freeman
[ 00:37:37,700 ] You have an opportunity if it's really challenging to do what's called a recapitalization, where you're basically saying we're going to change the whole ownership structure of the company and those initial investors are going to be shrunken down to a much smaller amount, right? It's challenging.
Jason Freeman
[ 00:37:55,210 ] I remember what got me through it is: do you have a mission you care about? Do you have a team that's still dedicated to the mission?
Jason Freeman
[ 00:38:02,790 ] Do you still have that kind of unfair advantage as a founder? where you can still make your mark and still go for it. And if new investors or former investors, but maybe not all of them, want to recapitalize because the vision is still there and you're still excited about it, I can speak from personal experience, it is possible. that was the time though that i had the challenge with our board member where the board member was saying no no i don't i don't feel like we should do that and i said well we need to give the investors a chance to to do that we're going to sit right next to each other when we're going to give the investors a chance to do that and so i remember you know, having to pull the phone away from my ear because of all the expletives and yelling that was happening on that. He brought it back and said, well, I see you at that meeting. And he's like, yes, I'll see you there. And so it's hard. And if you have something deep down that you're trying to accomplish.
Anushka Singh
[ 00:38:55,940 ] that is what can get you through it um i don't know if that's not a technical answer to your question but i don't think that is a technical solution i mean when you when you're going through a down round it's you it's more about saving the company saving the relationships than I mean, the cap table is like a secondary, right? If the people don't survive, you don't really have a company to worry about a cap table. But, yeah.
Anushka Singh
[ 00:39:23,730 ] For questions? Sure. I do have one more question, but I'm not sure how relevant it is. It's around non-competes and non-solicitations. I know Jason had a story he wanted to share around that.
Anushka Singh
[ 00:39:38,450 ] on like mitigation practices with founders and how to use these tools?
Jason Freeman
[ 00:39:42,730 ] Oh, well, again, I just call it being human. So back when like non-competes were a big thing in Massachusetts. um our co-founding team made a decision not to include those in our employment agreements we did have a non-solicitation we did we did have protection of our ip but basically when you're thinking about slicing it right really i i would ask the question how would you want to be treated right so then i try to go into each of these things as how would i want to be treated of course i'm not going to steal employees from the company of course i'm not going to steal ip but i shouldn't sit under a non-compete that doesn't make sense to me And then yet I didn't have the audacity to go to my first and second employee. So I'm like, you've bought into this vision. We're in it together. We're going to hold hands. Oh, but sorry, you know, I'm going to hold you to a different standard than I would hold myself. So, yeah.
Anushka Singh
[ 00:40:33,090 ] All right, yeah, so we're open to questions now. We have some great people running around with mics. Yes.
SPEAKER_6
[ 00:40:49,650 ] Hi, my name is Brendan Lewis um I just started working with a startup and I wanted a question about how I should ask them about equity and payments and all that, since you guys are more founding oriented.
Linda Brown
[ 00:41:09,390 ] yeah sure announced to the session after this on the fifth floor is going into a ton of additional detail and specifics so just letting everybody know that is happening.
Annie Garofalo
[ 00:41:22,670 ] Like from the human side, like how to request compensation in an early stage startup. Yeah, that's a great question.
Jason Freeman
[ 00:41:29,470 ] yeah I think the biggest thing is asking what they already have plans right, so that is a perfectly legitimate question going into a job interview, especially for an early stage is like what is your option plan for early stage employees. and like you can use some of these terms and maybe look them up before going in but like are there triggers if the company sells like these these questions are not threatening hopefully As a founder, this would be like, oh, wow, this person's really interested in what they're doing and they've done their homework. So I would say first off, going in and asking the question is not going to put you on your back foot. Like I would put you on your front foot, like, oh, they're actually getting what stage we're at and how this compensation is actually going to work.
Jason Freeman
[ 00:42:16,220 ] So let me know. Yeah.
Annie Garofalo
[ 00:42:18,440 ] And the only thing I would add to that is thinking about compensation for joining that startup as a package. It's not just equity— it's not just cash, but it's also like, what's your title, and like, can you negotiate up a good title so that it looks good on your resume. Are you doing taking responsibility for something you haven't done before, and like, really learning, so make your position work for you and whatever your longer-term goals are. And of course, a piece of that is being incentivized by being compensated for the work that you're doing while you're taking this risk. But in the meantime, because we don't know if that equity will be worth anything, make sure you're also getting the value out of. out of the role in the title that you want now as well.
Jason Freeman
[ 00:43:02,150 ] I love when a potential employee asks me, what's the strike price right now? I'm like, all right, you're getting it now. I can see what's going on here.
Anushka Singh
[ 00:43:10,590 ] I'll just add one more thing. If you're looking for market rates and how much generally someone in your role would get, kata . com slash data they do a lot of this research and they'll put out, for your industry, within startups, you know, if it's a series like series a or pre-seed or seed, what are the employee equity ownerships. Also founder equity ownerships, advisor ownerships, they have a lot of data around this. Just giving you like a baseline and then use their suggestions to work on top of that baseline.
Anushka Singh
[ 00:43:47,030 ] karta . com, C-A-R-T-A dot com slash data.
Anushka Singh
[ 00:43:53,070 ] All right. Yes.
SPEAKER_5
[ 00:43:59,850 ] Yeah, my name is Marie Schwartz. I'm a founder who sold their business last year to a strategic buyer, and I'm thinking of starting a second one. Congratulations. Thank you. And the question of options always bugged, you know, bothered, not bothered me, but I didn't really know how to handle it before.
SPEAKER_5
[ 00:44:16,660 ] And I also find that sometimes, when you hire junior people, not to put anything out against junior people, when you start scaling, they don't have the skills that you need, right? So how do you handle options?
SPEAKER_5
[ 00:44:30,070 ] In a fair way, but that gives you some uh recourse if they're you know, if it's not quite the right fit. I mean, I've gotten much better at hiring people, but at the beginning, I wasn't very good at it, and there were people I wouldn't have wanted to give options to after a year. You know, what I mean. So where's that? How do you strike that balance and how do you protect yourself in case somebody doesn't work out?
Jason Freeman
[ 00:44:56,620 ] Yeah, I mean, a lot of these options agreements have built-in structure around, for example, if you terminate that employment, the options you know expire. Things like that. Whereas, like an advisor, actually—I feel like the option agreements, because a lot of advisors are investors, they built them in so that way. It's you know, it's better for them. These employee option plans, you know, agreements tend to be employer-friendly more so. Just make sure that that's built into the agreement and, um, and it's definitely a thing you use. Because you may lay someone off before their cliff, and that's a hard conversation, but it means they don't get
Annie Garofalo
[ 00:45:43,520 ] Their options, and even framing it as like a trial period or a work sample where you're compensating them with like cash and salary, but that they kind of like unlock these options after a year of high performing or something like that. But I also, it's similar to the trial periods that I recommend with co-founders, like as much information as you can get.
Anushka Singh
[ 00:46:04,880 ] I will just add one more thing. There is the option. You can always buy the options back from the employee if they are willing to sell and negotiate that price and all. One recommendation to everybody here, whether you're a founder or an employee or looking to be an employee. Please look up these terms, because many a times, especially when I go out to hire, junior people don't know how all these equity things work. And the fact that the they have to especially like even advisors and all of their first time advising um you have to go through the 83b election what does 409 valuation mean and things like that just recommendation look all of those up i think um the 230 session on the fifth floor might you know the lawyers might be talking a little bit more about this But be knowledgeable by yourself. Don't just rely on the other person conveying all the knowledge to you.
Anushka Singh
[ 00:46:59,850 ] Yes.
SPEAKER_8
[ 00:47:05,740 ] All right, thank you so much. So my name is Andrew Lee. I'm a co-founder of Super Big Data. So this is my third time. So I have a question is that, you know, I ever have the partner, also the co-founder, so his wife.
SPEAKER_8
[ 00:47:22,750 ] disagree with share, with responsibility. Do you have ever seen this problem before? How do you solve it?
Jason Freeman
[ 00:47:36,560 ] yeah i mean it is you're when you're when you're going into business with someone you also know you're going into business with their whole family and so this is part of a founder dating i just recently gone through is we talked a lot about being fathers we talked a lot about being husbands we talked a lot about the expectations we have And then one of the things that one of my first co-founder, he gave me this wisdom that I've taken with me and I continue to share too. with with co-founding relationships that i've had since then is he said jason sometimes you're going to be sprinting and i'm going to be jogging next to you right and sometimes i'm going to be sprinting and you're going to be jogging next to me And so I need you to promise me right now that we know that we're doing our best at all times. Right. But those times might be different for us where you're just in it right now. And I maybe seem like I like. I'm just doing my work as usual. And there'll be times where I'm just in it right now. So he gave me that perspective, this holistic view of you're in partnership with a human being, just like in a marriage.
Jason Freeman
[ 00:48:44,290 ] And so you have to be transparent in your communication, but also set expectations.
Jason Freeman
[ 00:48:51,149 ] Like, this is going to be a season for me where I'm sprinting. I need your support in that. And I know that, you know, you have that season coming up later in this next year. So let's be, let's talk to our families. Let's try to plan ahead. It's again, it's not like rocket science, it's communication, right? And, and respect. Yeah. So did that answer your question?
Annie Garofalo
[ 00:49:13,930 ] No, no, it sounds tricky. One like trick I use with clients is just trying to help them reframe it from 'me versus you' to 'us versus the problem' and saying, 'Okay.' We're right now kind of in this gridlock because we've defaulted to, 'it feels like it's me versus you' or feels like it's me versus your wife.' And like, what is the actual problem here? Like, is it that we're like, 'what are we really disagreeing on' and giving some time to like defining that problem space? it doesn't always lead to like a perfect outcome and sometimes the if the conversations get particularly challenging there can be a break in trust and commitment which are the two biggest indicators of a healthy relationship And if it goes into contempt, then that can be really challenging.
Annie Garofalo
[ 00:50:01,430 ] But I found that the kind of us versus the problem instead of me versus you can be a helpful reframing mechanism if there is still that foundation of trust and commitment.
Jason Freeman
[ 00:50:13,770 ] Well, if you're talking like a problem, so like we, my co-founder and I will have this conversation. I don't assume it's a done, it's a done discussion, but we've made a decision that we're not drawing salary right now, even as we're maybe bringing on other employees. Right. And so, like I regularly ask him and say, 'Are you still good with that?'
Jason Freeman
[ 00:50:31,300 ] Like, are we still okay? Are you still in a cash position that you still feel comfortable? We both have young children. We both have, you know, partnerships that are counting on us. And we're not bringing in any cash right now, even as we're bringing in investment. And so it's like, that's not a necessarily easy question, right? But it's an important one, I think.
Annie Garofalo
[ 00:50:51,850 ] Yeah. And it gets to that framing that I was saying earlier about chapters. Like the company happens in chapters, your agreements should happen in chapters, and those should be reevaluated at three months, six months, every year. But yeah, like if you're starting today and you expect it to be the exact same ownership structure in 10 years, that's just probably not reality. So you might as well have the conversation on a more regular basis.
Anushka Singh
[ 00:51:15,330 ] I will say if the actual conversation is the problem, there's a lot of techniques in conflict resolution on how to have a good and productive conversation. There's also a book on that that you can go and look up. But the core of all of that comes down to: you need to understand what are the core assumptions or the core expectations that they have. Why does your co-founder's wife think that it is unequal? What are her ambitions and what is she expecting? And if you can bring that into the conversation, then you might find an alternative way of addressing those that may not always be a higher equity amount.
Anushka Singh
[ 00:51:52,390 ] But yeah, I can send you the book details if you want, which explains it much better than I did. Other questions? Yes.
SPEAKER_4
[ 00:52:09,080 ] All right, so we were talking earlier about how there's a hard pile and an easy pile for the investors. So I'm on my second company and I've gotten a little bit of experience with, say, East Coast versus West Coast when it comes to cap tables. So I'd really love your perspective on the school of thoughts between co-founders should have equal share or co-founders should not have equal share because I've experienced that people have very strong opinions about this in Silicon Valley and in Boston.
Jason Freeman
[ 00:52:37,340 ] yeah i mean it's a it's a can i feel that yeah um it is a super challenging question of course and if you and your co-founder have gotten to the point where you believe that's the right split there are ways to just make it more tenable to the investors so like for example you can build into your agreement that someone has decision-making power.
Jason Freeman
[ 00:53:00,040 ] And that alone, in my opinion, should dispel a lot of the stress around a 50-50 split. And in doing so, it's not just on paper, but it's true that the person who doesn't have the decision-making power can still disagree and commit.
Jason Freeman
[ 00:53:19,120 ] So with my co-founder right now, we did split 50-50. We do have an agreement in place where one of us has decision-making power and the other one— and we had talked about this multiple times, probably like four times. And we went on walks together and talked it through. But we were like, can we disagree and still commit? And after the end of, I think, the second walk or third walk, we both came to the agreement that yes. The person who doesn't have decision-making power will still disagree and commit. Outside of values and morals and that stuff, but business stuff. And so in my experience, that has dispelled any.
Jason Freeman
[ 00:53:57,310 ] any concern around like that 50 50 from a decision making standpoint now then there's still the the question of are do you have equal contribution and that's when you got to know yourself and you got to know who you're you're doing business with but if you've come to that then I say that that's the investor's problem, and you're going to go find a better one. If they're having an issue with that, then that's their issue.
Jason Freeman
[ 00:54:24,470 ] I mean, this is case by case. So in this case, both my co-founder and I have come from— we both have been entrepreneurs before.
Jason Freeman
[ 00:54:34,630 ] We're both coming off of quite a bit of professional success. And so it's one of those things where we just talked deeply about it and felt good about the decision in the end and still feel good about it right now. Granted, it's not distributed yet, so it's there's a vesting schedule so that also makes you investable. For example, if there's a problem, then and one of us has to exit, they're not going to get all their stock. Right? And so there's mechanisms to build in that you make this a whole lot safer for an investor to say, yeah, I can buy into that, even though there's 50-50 split.
Annie Garofalo
[ 00:55:13,120 ] And statistically, just because I was like kind of entrepreneurially raised on the West Coast where at least with like Y Combinator, they are like default to that 50-50 split. I did some research before this and found that only 46% of two founder, like dual founder teams split equally. So that's like less than half. Whereas being out there, it's like you feel like it's everyone, at least I did. And then with three, with like trios, it's only 27%. that split equally.
Annie Garofalo
[ 00:55:43,850 ] So I think from those statistics, it just emphasizes that point of it really depends on your team and your partnership.
Annie Garofalo
[ 00:55:52,960 ] That the decision you make today isn't necessarily going to be reflective of the ownership structure in five years. And so, if this is something that you get really stuck on with your potential co-founder or with your potential investor—like, that's them showing their true colors in terms of their very positions oriented instead of interest oriented—this is like a really big flag or at least a good consideration to know in advance of going into this partnership with them.
Jason Freeman
[ 00:56:20,170 ] Yeah, because that's not going to be the only thing they're going to argue with you about that feels ticky-tacky.
Annie Garofalo
[ 00:56:25,050 ] It's representative. Yeah, it's representative.
SPEAKER_7
[ 00:56:27,670 ] Hi there. Thanks so much for this.
SPEAKER_7
[ 00:56:30,840 ] so i think we've talked a lot about kind of how to set everything up well so that you go into something well and i'm curious about like for those of us in the room hypothetically who've already set something up and maybe not asked all the questions that you've talked about as best practice like What should we be considering if maybe we did go in with equal partnership? And it's not terrible yet, but the flags that you've presented could happen. Or how do we think about readjusting while managing relationships and all that stuff?
Jason Freeman
[ 00:57:06,620 ] I mean so much of this is about leverage. So it's like, do you have the right board who can help you? Because I've had that situation before where something's going off the rails. My board member gave me this metaphor. He's like, 'We have no triangles here.' He's like, 'So we are all in alignment. It's not going to go like this, right? It's going to be one, it's going to be, you know.' back-and-forth communication Because you might have a co-founder who goes to the board behind your back right and says you know They're this is the company's not going like how it should and these things and then that's when if you have a good board They're like well, then let's bring everybody into a room Right so having some leverage and having some backup there, the other thing is speaking to the mission speaking to traction if you're if the company is doing important stuff and making progress that is. That can be both, you know, something a little scary because you might have a former co-founder who's sitting on that equity and it's dead weight to you, right? But you can also maybe speak to their, like, what got them excited about this in the first place.
Jason Freeman
[ 00:58:10,590 ] And you can go to them and say, do you want this to die? Because if I can't raise money right now, it's going to die. and if i can't raise money with this dead weight on my cap table so what do you want you're at a decision point for yourself right now you can sit on this and it's not worth nothing or you can help us and it's potentially worth something and you get to say you were part of something really important
Jason Freeman
[ 00:58:31,560 ] Yeah.
Annie Garofalo
[ 00:58:31,960 ] And if you're like earlier on in that journey where it's just like you're like, I wish we had these conversations, but we didn't. I think it's never too late to have the conversations. And the way that I recommend the framing of it is tie it to like an upcoming milestone. and to say, hey, we're going to need to be growing really fast for this next fundraiser. We need to be preparing for this as partners, and use that to frame up the conversation around that social contract. Here are some topics, and I'm happy to talk with you about the topics that I recommend teams to cover. But I typically work with series A teams. So they've already been operating for many years, have like 100 plus employees, but they're still having these conversations and like iterating on them. So it's not too late.
Anushka Singh
[ 00:59:15,360 ] I will add one more thing. A lot of these things around equity and at least the things on paper can be changed. They are malleable and there are ways to change it. The only downside is to change it, it requires a lot of lawyer fees. So if you don't like paying lawyers, set it up early on in a better way. But yeah, you can always go back and have these conversations. Even in early stages, I have had a bunch of teams break up and people come and go. It's the only thing that you need is the courage to have that hard conversation and hopefully it resolves in a way that you have minimal lawyer fees at the end of it. Yeah.
Linda Brown
[ 00:59:53,950 ] That's awesome. Thank you. I really want to thank our speakers today. Very insightful.
Anushka Singh
[ 00:59:59,750 ] One last question.
Anushka Singh
[ 01:00:06,279 ] Just before we end this, I wanted both of them, because it has been one hour, and I don't think we remember everything that was spoken here.
Linda Brown
[ 01:00:14,780 ] If you have one takeaway that you would want everyone to go back with, my takeaways have had many issues with options and everything else. One is the Slicing Pie app, which I think is it. It was a wonderful thing, and I'm I wish we had had that. Making things more human. Thank you. And I'm a big fan of therapy and that third-party view. So I love the thought of bringing somebody in to act as that voice of reason when you have those tension-filled conversations. And then the last thing is self-education, because you do not want to know what my first alternative minimum tax bill was on my stock options from my first startup. It was bad. So you do want to educate yourself if you're getting into that situation, even as an employee.
Annie Garofalo
[ 01:01:17,550 ] so those are mine yeah amazing definitely covered my amazing takeaways um mine is that it's like equity is more than just like the numbers and the cap table it should be a reflection of your partnership and so do the work that and have those hard have the courage to have those hard conversations to create a structure that works for you.
Jason Freeman
[ 01:01:38,840 ] I like the marriage counseling before you get married idea. I think this is a really powerful that you said at the beginning.
SPEAKER_9
[ 01:01:46,180 ] All right. That was it.
Linda Brown
[ 01:01:48,140 ] Awesome. I'll also say, too, for folks early in their career, do not worry about the options.
Linda Brown
[ 01:01:57,770 ] You will get so much valuable experience and exposure to different roles by being in a startup. It will pay for itself. Think about it as a bonus. Yes, maybe this will come to fruition. You will learn so much in the meantime that you should not be worrying about it if you're early in your career and you're anywhere past like I'd say the 50th employee. Just go and have fun with it. all right um so uh closing script um we know that you probably want to mingle and line up with each of our panelists to ask them more questions but we do need to reset the room and have people sign in for the next event So I will eventually forcibly heard you out of the room, but if you could help me with that, that would be greatly appreciated.
Linda Brown
[ 01:02:49,220 ] Don't forget there's a community bulletin board on the first floor where people are exchanging ideas and opportunities.
Linda Brown
[ 01:02:56,780 ] Also, the headshot stuff is upstairs. That's really fun, and I mentioned the next session is nitty-gritty stuff about all the documents and all the legalese for this kind of stuff, and that's up on the fifth floor happening at 2 . 30. and that's it thank you everyone appreciate your time
