Five ownership structure models:
1. Average distribution:
-Description: Share the company's equity equally among the founding team members, and everyone has the same shareholding ratio.
-Advantages: simple and fair, suitable for team members to make similar contributions in the early stage of the company.
-Note: It is not applicable when the contributions of team members are obviously different.
2. Role-based allocation:
-Description: The shares are distributed according to the roles and responsibilities of the founding team members, and the members in charge of important functions get more shares.
-Advantages: It can more accurately reflect the actual contributions and responsibilities of team members.
-Note: Roles and responsibilities need to be clearly defined, and adjustments need to be evaluated regularly.
3. Time stratification:
-Description: As time goes on, team members gradually gain more equity and encourage them to stay in the company for a long time.
-Advantages: Reward long-term dedicated team members and reduce early turnover.
-Note: It is necessary to clarify the standards and mechanisms of time stratification.
4. Performance reward:
-Description: Reward equity according to the performance of team members and the development of the company.
-Advantages: Motivate the team to make greater efforts for the success of the company.
-Note: The evaluation criteria and reward mechanism need to be clarified.
5. Financing rounds:
-Description: With the different financing rounds of the company, new investors get equity, while the relative equity ratio of old shareholders may be diluted.
-Advantages: Providing financing funds to support the company's development.
-Note: The founding team needs to weigh the timing and degree of financing to avoid over-dilution.
Description of equity design:
1. Make a clear equity agreement:
-Formulate a detailed equity agreement, and clarify the equity distribution, withdrawal mechanism, shareholders' rights and obligations, etc.
2. Consider future financing:
-Consider the possible financing needs in the future when designing the equity, and avoid over-diluting the founding team when financing.
3. Pay attention to fairness and transparency:
-maintain fairness and transparency and avoid internal disputes caused by equity distribution.
4. Flexible response to change:
-Equity design needs to be flexible in responding to company development and team changes, and can be adjusted if necessary.
5. Attraction and motivation:
-Attract and motivate outstanding team members through equity design, and let them share the growth value of the company.
Equity allocation is an important link in the development of start-up companies, and it is necessary to formulate a reasonable equity structure in combination with the actual situation of the company and the contributions of team members.
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