Even in small acquisitions of $5 MM or less, the financial return from the Equity Collective far exceeds the average course fee by multiple times. Below are four hypothetical situations where a Founder in the Equity Collective sells their company for anywhere between $5 MM and $250 MM. The model assumes that the collective will be diluted over time as the company gets larger and brings on investors, senior employees, and partners. The model also assumes that there are 10 graduating founders, each getting 1/10 of the collective 25% allocation to founders, or 2.5% each. Please note that collective returns are paid out to individual founders, not to their companies, so returns can be used for anything that you want, from paying rent to investing in your startup.
|Warrant or Option Strike Price||$1,000,000||$1,000,000||$1,000,000||$1,000,000||*Conservative of $1M to exercise a warrant|
|Initial Equity Collective %||4.00%||4.00%||4.00%||4.00%|
|Dilution of Equity Collective %||10%||30%||40%||50%||*Estimate based on typical dilution|
|Final Equity Collective %||3.60%||2.80%||2.40%||2.00%||*Warrant % after estimated dilution|
|Total Equity Collective Return||$144,000||$252,000||$1,176,500||$4,980,000||*Final Warrant % * (exit valuation - strike price)|
|All founders Equity Collective Return||$36,000||$63,000||$294,000||$1,245,000||*25% of liquidity goes to the cohort's alumni|
|Personal Equity Collective Return||$3,600||$6,300||$29,400||$124,500||*Based on avg FI graduating class size of 10|