The Founder Institute analyzed multiple equity programs, and choose 4% as the smallest amount of equity to contribute that can still return reasonable value to the collective. As one example, setting up an advisory board normally requires 5% of a company to attract 5 or 6 advisors, and the Founder Institute wanted to be less than 5% to attract over two dozen Mentors during the program. As another example, most funding incubators purchase approximately 7-10% of a company for approximately $20,000, and FI wanted to be less than these types of programs. At 4%, founders in the collective can get $100,000 in cash returns from low a nine-figure exit.
Why is the Equity Collective 4%? Print
Created by: Founder Institute Support Team
Modified on: Mon, Mar 2, 2020 at 4:56 PM
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