Introduction to Founder Equity
Startup Codex

Understanding the fundamentals of equity is essential for a founder. And for those who have never handled it before, this versatile corporate tool can be a little intimidating.

Matt Howland's article provides a complete and didactic overview and deserves its place in our selection.

He presents what a Cap Table is, the different types of equities, company valuation, option grants, strike price, stock options, vesting period and option pool.

A good first reading on the subject.

Understanding and managing equity can be confusing, but as a founder, it’s essential to take the time to learn equity basics. Getting equity right ensures:

  • Your employees are motivated to do their best work and stick around
  • You get the best possible investors and term sheets
  • You as a founder retain a meaningful portion of what you’re building
  • You avoid legal trouble
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