Essays/splitting shares of a startup should reflect future work
When starting a company with several people, there is always a topic that gives raise to many discussions: how to split the pie. This becomes especially hard when founders have very different skills and each one over estimates how much brings into the table.
But there is something that is fundamental: shares in a company should reflect future work, not past achievements.
I may have a brilliant idea about a product, an app, or whatnot. I setup a company with few more people who can execute on it and bring it to success. However, if I won't be involved in the company, why would I receive ownership of the company?
If I would hold a patent, for example, there could easily be a license agreement. I can even make money out of my idea. However, there is a world of difference between an idea and its execution. And that's where many founders make the most crucial mistake.
People put too much value into ideas, and underestimate the work it takes to make them a reality.
When a company is starting, shares should be divided according to how much value each participant will contribute from that moment to the future. Of course there's always room for negotiation, and the perception of value can slightly shift, but it should never be based on what people have done up to that moment.
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