SHARING OWNERSHIP

I have seen many ways to evaluate the worth of each contributor to a start-up company. I don’t really know that this game can ever be right and equitable. However it seems that we must keep the illusion that somehow this can be done in an appropriate way. Of course, this is only valid if we believe in possible success and the big money that could come with it. And we know money comes biggest to early shareholders of these success stories.

The first thing I’d like to share is that such stories are nothing but mere illusions. Young and not so young entrepreneurs, including me, run restlessly behind this illusion just like a greyhound would run behind a mechanical rabbit at a racetrack. The dog actually believes that somehow it could catch it, and likewise we believe that we can actually build such a business.

I'll pretend to believe it one more time... and one time after that! Because it IS fun!

Then in consequence, let us ponder over what a just way to share ownership in that initial star-to-be company.

I’d like to propose two possible solutions to this.

 Solution 1

Give one share to every one who sat down more than one hour with the initiators of the project and subsequently carried the word on. They all helped t shape it, to mature it, to transform it into something greater than the initiators had intended it to be. They all carried to another level. This new level is where people start to believe in this new business and what it stands for. This new level, if ever reached, is where the financial success is made. This, I believe, is sufficient reason to give a share of the company to all these people.

Solution 2

The other way I’d like to share is the classic idea that the owners of the initial business represent three individuals or groups of people.

Share
  1. The visionary: the person with the dream. That person that people can clearly identify as different yet the same as all of us. He who has the spark that we wished to have, while communicating what we have always believed. He is usually the leader whom all follows. He transmits a concept bigger than himself.
  2. The transformers: The group of people who put their spirit and talent into making the dream a reality. They are the experts, the marketing men, the lawyers, the engineers, the technicians, and the busy bodies, who know how to transform the dream into something real. They are the makers of that first prototype, they get that first press interview, they break that legal barrier… they do whatever their particular talent allows to do to contribute to the dream.
  3. The angels: The people who will put in the first real money. That first million dollars that really gets the thing flying, that starts the world understanding what this new thing is all about.

These three actors have an approximately equal role in getting the ball rolling. One third for the idea, one third for the operation, one third for money.