I'm working on a funding deal with a friendly angel. But they're asking for a lot of equity, to be treated almost as a founder. They're a valuable person to help get a big idea off the ground, but the terms being asked for are not commercial. The turning point seems to be this: in the funding process, when should the founders lose majority ownership of the common stock? Seed, Series A, Series B, etc? Any thoughts on what is commercially reasonable?
Read this blog http://calacanis.com/ it explains the different stages compare to the different dilutions.
Also read:
http://www.bothsidesofthetable.com/2011/10/14/understanding-how-dilution-affects-you-at-a-startup/
http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/
Answered 9 years ago
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