Equity & fundraising program plan

This page is summarizing the rough plan of the equity program for the employees, founders, investors and advisors.

Equity is a mechanism of motivation and compensation at early company stages when risks are high and cash is low as well as attracting and retaining professional talent at later company phases. Making everyone owning the company is part of our company values - šŸTeam effort and šŸÆGather value.

If you leave, you loose options. Company can print more shares. Options are virtual and are not affecting the legal body of Gratheon OƜ registry as mentioned in šŸ„§Legal training by Hedman

Aggregated CAP table, an example

Approximate expected distribution of shares over time.

For team option pool and founders, we will have 1 year cliff, 4 years of vesting time.

Whoangel phase ā›³pre-seedseedseries A
Founder60% (600 000)54.3%41%
Team option pool38% (380 000)34.3%26%
Investors2% (2 000)+20% (200 000)+10% (110 000)+20% (242 000)
(~0.1-1% per person)
5% (50 000)
Capital to raise in convertible loan40k
in convertible notes

Fundraising goalfor software and hardware prototype developmentdevelopment runway for the prototype to be production-readyenter the marketscale business in Europe
Shares total1 000 0001 2000001 210 0001 452 000
Post-money valuation2M7M14M50M
Share value0.04611.534
Join time risk coefficient1051.51

ā›² Team option pool calculation

Assuming we are successful and do reach 100 employees after series A with initial option pool of 380 000 shares equity and do not print more shares, on average each employee gets ~ 3800 shares at 34 EUR per share valuation.

Hierarchical equity

Flat equity model does not take into consideration join time which involves higher risks.
And it does not differentiate by
skill level.

To combat this we add Join time risk coefficient (above) that depends on company phase (round) and Equity staff level coefficient that depends on experience / seniority level. Both affect the real amount of shares provided to the person.

The negative side is that it is not possible to balance in advance amount of employees and their levels. So to calculate base level (2000 shares), we assume that we can hire 100 Senior engineers + have some buffer for

Staff levels

LevelNameEquity plan (shares)Equity staff level coefficient
L4šŸ„‡Senior / Manager30001.5
L5šŸ…Staff / Lead / Head40002
L6šŸŽ–ļøPrincipal / Director / Group EM60003
L7šŸ”†Fellow / C* / VP80004

Investment funding rounds

At each step of funding round, some equity is given away to the investors in return for raised capital. New investor gets new shares, nothing happens to previously given away shares, thus ownership % is diluted but valuation of the company increases.

Software to consider