Description

This curriculum spans the breadth of equity decision-making in a high-growth startup, comparable in scope to a multi-workshop advisory engagement with a venture-backed company navigating co-founder allocations, investor rounds, global hires, and exit preparation.

Module 1: Foundational Equity Allocation Among Co-Founders

Determining ownership percentages based on pre-founding contributions such as IP, customer access, or prior development work.
Negotiating equity splits when one founder takes a salary and others do not during the bootstrap phase.
Structuring vesting schedules for co-founders to mitigate risk of early departure after large equity grants.
Deciding whether to allocate equity based on future roles or past contributions, and documenting the rationale.
Handling disputes when a founder’s actual contribution diverges significantly from initial expectations.
Choosing between equal splits and merit-based allocations while preserving decision-making efficiency.

Module 2: Legal Structures and Equity Instruments

Selecting between common stock, preferred stock, and convertible instruments for different stakeholder classes.
Choosing a jurisdiction for incorporation based on investor familiarity, tax implications, and exit flexibility.
Implementing founder stock with standard 409A valuations to avoid IRS penalties on early exercise.
Deciding when to issue SAFEs versus priced rounds, considering dilution transparency and investor expectations.
Structuring option pools pre- or post-money in seed rounds to control founder dilution.
Managing cap table complexity when using multiple instruments like SAFEs, convertible notes, and equity grants.

Module 3: Hiring Key Executives and Equity Compensation

Setting benchmark equity ranges for C-suite hires relative to stage, industry, and geography.
Negotiating upfront grants versus performance-based tranches for executive compensation.
Structuring double-trigger acceleration clauses in executive agreements for acquisition scenarios.
Aligning vesting schedules with company milestones while maintaining retention incentives.
Disclosing equity value using realistic valuations, not optimistic projections, during recruitment.
Managing tax implications for executives exercising ISOs versus NSOs in high-income jurisdictions.

Module 4: Investor Negotiations and Dilution Management

Negotiating pre-money valuation to balance dilution with maintaining sufficient ownership for future rounds.
Assessing the long-term impact of investor rights such as anti-dilution provisions and liquidation preferences.
Deciding how much equity to concede for strategic investors who bring distribution or technical expertise.
Managing board seat allocations that correlate with equity stakes while preserving founder control.
Explaining dilution effects to early team members when raising large rounds with new investors.
Handling down rounds by restructuring existing equity to avoid cap table gridlock and team morale collapse.

Module 5: Employee Stock Option Plan (ESOP) Design and Administration

Determining the initial ESOP pool size as a percentage of post-money capitalization.
Setting internal equity bands for roles from individual contributor to director level.
Updating 409A valuations quarterly to ensure compliant exercise prices across option grants.
Deciding whether to allow early exercise of options and managing associated tax and repurchase risks.
Communicating equity value effectively without creating unrealistic financial expectations.
Handling unexercised options after employee termination within standard 90-day exercise windows.

Module 6: Equity in International Expansion and Remote Teams

Adapting equity grants for employees in countries with restrictive foreign ownership or securities laws.
Choosing between local entity stock options versus US-based phantom equity for overseas hires.
Managing currency risk when option exercise prices and potential payouts are in USD.
Complying with labor laws that treat stock options as deferred compensation in certain jurisdictions.
Structuring equity for regional leaders who manage P&L but report remotely.
Coordinating global equity grants with local tax advisors to avoid withholding or reporting violations.

Module 7: Exit Planning and Equity Realization

Modeling post-exit proceeds for founders, employees, and investors under different acquisition prices.
Negotiating founder rollover equity in asset purchases where stock isn’t directly transferable.
Handling unvested equity during M&A due diligence and deciding on acceleration terms.
Preparing cap table summaries for acquirers, including option exercises and convertible note conversions.
Advising employees on exercise decisions during acquisition hold periods or earn-outs.
Structuring secondary sales pre-exit to provide liquidity while maintaining alignment.

Module 8: Governance, Transparency, and Ongoing Equity Management

Scheduling regular cap table reviews with legal and financial advisors to track dilution trends.
Deciding when to disclose individual equity stakes to team members for transparency.
Updating shareholder agreements when new classes of stock are introduced.
Managing information rights requests from minority shareholders post-Series A.
Handling disputes over perceived inequities in grants between early and mid-hire employees.
Maintaining accurate records in cap table software to support audits, fundraising, and exits.