- Allocating shares in the early stages of forming a company
- Reply To: Allocating shares in the early stages of forming a company
Reply submitted 06/08/21 @ 11:32am::
This is a great question and it is really difficult. Ideally, you would ‘work this out’ after the journey, across who did what, who added the most value and who went beyond the realm. What matters is what people do and who goes on the journey ‘over time’ not as a one-off event. You also want to make sure you protect the cap table for the future.
It is not easy what you are doing – I would think about a few things
– can you give some stock for services done ‘on a project’ – yes
– don’t allocate it all now, really only allocate for projects done and then if they/you do more, allocate more
– make sure you leave room for future allocation
– use tools like ‘vesting over time’ so that if a person’s life changes or they decide to stop doing the mahi then they lose their allocation
Hope that helps.