a person’s strength is limited, so many people are willing to choose a partnership venture. So, now the question comes, after the partnership venture, how to divide the cake? Partnership entrepreneurship, perhaps the most painful thing is the cake between partners. This usually occurs in the early stages of entrepreneurship, then, how much equity should be divided into each person?
the simplest method is everybody equally. The reason is simple and clear. Usually, the first entrepreneurial team and friends and relatives who do business in this way. According to my experience, this approach is less controversial in the early stages, but often fails to reflect on each person’s contribution – to be naive, and to act in a spirit of fairness. This method is not suitable for the founder, more than three days after and, once someone feel cheated, or that others have not dedication, cooperation will will not be happy.
about early entrepreneurs who should get what cake, no hard and fast rules. It depends on the situation. For companies that have yet to earn income, I would not have accepted the idea that the valuation was well above the hundreds of thousands of pounds – even if they had a wonderful idea. Similarly, the management of the acquisition, the management of the free equity should not be more than 15% of the total, in fact, usually much lower than the proportion. However, each investor has a ruler, they will be judged according to different situations. If the management is too greedy, only according to their own how much equity to judge this point, investors tend to regret later.