How do we split Startup Equity between Studio and Founders? In this article, we’ll show you how we manage Equity Split in Mamazen Startup Studio.
Today, we will explain how we split shares between Studio and co-founders in a newly created startup.
Last week we revealed some processes adopted in our Dojo. Here you find the link to previous articles:
Equity Split, what is the model adopted by Mamazen?
As we explained in a previous article, Studios can manage Equity Split in different ways.
At Mamazen ideas are generated internally so the Studio is the founder of each Startup (Startup Studio as a Founder model).
There are no fixed rules, but we consider some specific drivers and we move within a range. The most important drivers are:
- How many co-founders we are hiring
- Co-Founders Seniority
Co-Founders are critical for the success of the Startups created by a Startup Studio, and if you want to learn more about hiring a co-founder, you can discover more following this link.
How to determine the equity kept by the Studio?
In Mamazen we identify a product/service-oriented Co-Founder; he/she will be in charge of product development. When a second co-founder is hired, we search for a business-oriented person, a good storyteller, a fundraiser with a good network if possible.
If the startup has only one co-founder with high seniority, the Studio keeps about 60% equity; if the startup has two co-founders and both are highly skilled, the Studio keeps 30-40% equity.
There are no fixed rules, but it is assessed case-by-case.
A Stock Option Pool for our co-founders
We reserve a 10% Option Pool in our startups for the co-founders. Why? Well, managers and key-man can acquire additional equity in the startups created.
How does a stock-option plan work?
Stock Options are incentives: best employees can buy a company’s shares at a predetermined price, the strike price.
Now that you know how we Manage the Equity Split in Mamazen Startup Studio; we will continue our journey in Mamazen Startup Studio in the next article, check our article for more insights into our Dojo!
Are talented people aware of their uniqueness? In many cases not. They are ambitious people, who always push their limits, who don’t settle and aren’t afraid of change, they are always waiting for it.
If you can’t turn off your brain because too many ideas are floating in your head, if you don’t identify yourself in a specific role, if your mantra is to learn something new every day, you’re the perfect talent for our Dojo!