You should be generous with equity to founders and early employees to foster a sense of ownership and commitment.

Founders should be generous with equity for early employees, as they are the ones who build the company over time.

In early-stage startups, technical employees may find themselves doing the work of a co-founder while receiving only 1% or less equity, which is not a fair arrangement.

Technical co-founders and early employees often get exploited and undervalued in startups, leading to unfair equity splits.

Early employees should receive more equity than those who join later because they take on greater risks and work harder in a chaotic startup environment.

Startups typically allocate between 10% and 20% of their equity for employee incentives, and venture capitalists often require this equity pool to be established before investing.

Before distributing equity, consider how many people you need to hire and how much equity you plan to allocate for their compensation. The first employee at a traditional Silicon Valley startup typically receives between one and two percent equity.

Be generous with co-founder equity to motivate your founding team during the challenging early years of a startup.

Most startups fail, and only a small percentage achieve significant financial success, so view equity as a tool to enhance your chances of success rather than a fixed resource to be divided.