Dynamic Equity Splits aren’t widely understood. If you are trying to convince skeptical investor, employee or partner that a dynamic split is the best way to go send them a copy of Get Them Gators!
This is a short guide that makes the case for a dynamic equity split.
Today nearly every startup company uses a pre-negotiated, fixed equity split. Because startups change, the split that was right one day will be wrong the next. This means that in nearly every startup investment there are less-than alligators () representing people who have more than they deserve. In a fixed equity split every deal is an alligator pit.
When we approach the alligator pit we do it with fear, mistrust and a keen instinct towards self-preservation. These are not the best building blocks for creating an awesome company.
If you want to create a working environment that is dominated by trust, fairness and cooperation where everyone has aligned incentives you’ve got to get them gators out of the equation.
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Published on November 12, 2013 15:14