Startup Equity Calculator

Figure out how much equity to grant new hires in seconds.

9 followers

Figure out how much equity to grant new hires in seconds.

9 followers

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Interesting. I think that equity levels are more tied to funding rounds than company size. The availability of capital means that a company can afford to keep more equity by paying cash. The "projections" on how much you would receive in an exit are just straight percentages, but most employees will experience dilution for later funding rounds and also face overhang from liquidation preferences, etc I had a calculation for the head of marketing ("lead") and for a 4-6 person company, the equity was .98% That is incredibly low

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12yr ago

Chart Fuse

Maker

@MarketerGraham Good call. I think that's why Buffer tops out the equity conversation at the 60 employee mark. Any company larger than that is likely Series A (or later) and therefore flush with cash (either profits or huge round), and can afford to pay market rate salaries. And great point on the dilution -- I whipped those out in a few minutes and didn't consider the true complexities to that process, which is obviously different for every deal. Re the 0.98% equity... I think a missing component here is the time* at which someone joins a company. For example, a 4-6 person team can actually be 5 years running, and a 10-person team can be in its infancy. While the Buffer calculations don't include the age of company metric, iContact's Ryan Allis does here (search "rule of thumb"): http://startupguide.com/entrepre...

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12yr ago

Buffer

@ryanckulp hey Ryan! Awesome stuff here. I just want to add that overall, our formula is very much a living formula. We don't always go too much further than we need to. For example, we'll definitely provide equity for people after we hit 60 people, we're just a little far away from that situation right now.

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12yr ago

Chart Fuse

Maker

@joelgascoigne Right on, thanks Joel! And happy to update as you guys do. Pushing new features next week to include Fred Wilson's formula, iContact's formula, etc all side by side. Thanks for checking this out. :)

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12yr ago

Chart Fuse

Maker

Hey everyone-- I"m a marketing guy at a YC alum and not* a developer. I took the One Month Rails course in 2 days this week and was hungry to build something. Calculations are based primarily off the Buffer "Open Equity" formula with a little bit of proprietary blend.

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12yr ago

Chart Fuse

Maker

@headhanchoarod Not really. Took VB in high school and have played with html/css ever since joining startupland last January. BTW, added 2 more calculators since originally posting this. :)

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12yr ago

This is an interesting read too. Michelle from @Keen_io compares multiple methods of calculating equity. https://keen.io/blog/29904565692...

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12yr ago

Chart Fuse

Maker

Thousands of calculations logged by ProductHunters... really interesting data. Will publish a visualization next week, thanks to all who tried the tool! **update** http://www.ryanckulp.com/startup...

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12yr ago

Chart Fuse

Maker

Hey everyone, the Paul Graham equity equation (paulgraham.com/equity.html) is now live on the tool. http://startupequity.io Enjoy!

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11yr ago