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A mistake commonly cited among startups in their initial years is their equity splits. It has been noticed that this split causes major angst or differences amongst the founders. Many have taken the route to go for equal splits believing that such behavior will keep all happy. In fact, many have gone a further step ahead by even confirming that each of the founders must get the same salary so that all are on equal footing. Yet, some exceptions have gone organic by not agreeing on the split ratio during the initial period but doing so later on post assessment of individual contributions of the founding members. The corporate strategy is similarly amended at that stage to incorporate the split ratio. However, this approach too has its pitfalls as it keeps uncertainly hanging around. Also it becomes extremely complicated to measure each individual’s contribution per se.

source:https://hbr.org/2016/02/the-very-first-mistake-most-startup-founders-make?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

 

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