What is Equity?

Equity represents ownership in our company, typically through shares of stock or equivalent tokens. When you own equity, you have a claim on a portion of our assets and earnings, proportional to the number of shares you hold.

Sharing Equity

In startups, sharing equity often involves distributing stakes to founders, key employees, or investors. This aligns their interests with the long-term success of our company and is sometimes referred to as 'sweat equity' – a form of compensation that motivates teams to work together towards common goals.

Equity Offers

Our equity offers involve giving shares to investors or employees in exchange for capital or services. There are two primary forms: investment for equity, where venture capitalists provide funding in return for a portion of our company's equity; and employee equity packages, which offer shares as part of compensation to motivate and retain top talent.

By grasping these concepts, you'll be better equipped to navigate your involvement with our company. We're committed to ensuring that your investment or employment is both beneficial and fulfilling. Please read on look over a hypothetical equity offering, and to read our entire sweat equity offering table.

A Hypothetical Sweat Equity offering

Meet Casey, a full-time developer who just joined us at Startr. As part of the employment package, Casey received an equity offer with some key terms. Let's break down what these terms mean.

Explanation

1. Full-Stack Developer:

   • 40 hours/week: 1.0% equity, crucial for product development.
   • 20 hours/week: 0.5% equity, reflecting half the time commitment.
   • 10 hours/week: 0.25% equity, for minimal part-time involvement.

2. Frontend and Backend Developers:

   • 40 hours/week: 0.8% equity.
   • 20 hours/week: 0.4% equity.
   • 10 hours/week: 0.2% equity.

3. DevOps Engineer:

   • 40 hours/week: 0.7% equity.
   • 20 hours/week: 0.35% equity.
   • 10 hours/week: 0.175% equity.

4. Marketing Specialist and Sales Representative:

   • 40 hours/week: 0.6% equity.
   • 20 hours/week: 0.3% equity.
   • 10 hours/week: 0.15% equity.

5. Customer Support Representative:

   • 40 hours/week: 0.5% equity.
   • 20 hours/week: 0.25% equity.
   • 10 hours/week: 0.125% equity.

6. Senior Expert Advisor:

   • 2 hours/week: 0.1% equity, reflecting high value despite limited time.
   • 1 hour/week: 0.05% equity, for very minimal yet impactful contributions.

By including senior expert advisors with 1-2 hours per week commitment, we can leverage their extensive experience and network, contributing significantly to our startup’s strategic direction and growth while maintaining cost efficiency.

Selling and Sharing Equity

We believe that empowering growth requires transparency and flexibility in our equity structure. To achieve this, we've created a dedicated pool of shares specifically designed for investors who wish to buy into the company.

This pool allows us to maintain a consistent ownership percentage among current shareholders while still providing opportunities for new investors to join the fold. By separating these two types of equity sales, we can ensure that our existing stakeholders remain invested in our growth and success.

Our equity pool enables us to:

• Raise capital efficiently
• Manage daily operations effectively
• Reduce debt strategically

By doing so, we're creating a more stable foundation for our company's continued expansion. At Start LLC, we're committed to fostering a culture of transparency and collaboration – and our dedicated equity pool is just one example of how we're putting these values into practice.