Posts Tagged "Common Mistakes"

No Free Ride for Free Riders

Posted by on Oct 2, 2012 in Blog | 0 comments

First published on Of all the plethora of popular economic concepts, none is more aggravating to the hard-working entrepreneur than the free rider problem. This occurs when someone enjoys the benefits of an activity without paying for it or, in the case of a start-up company, without working as hard as others. Of course, this is a problem in all aspects of life, but especially poignant when a start-up team member, having received equity compensation, reaps the benefits of a liquidation event even though their contribution to the company’s success was smaller than the...

Read More

Slicing Pie: A Guide to Dividing Up Early-Stage Start-up Equity

Posted by on Sep 5, 2012 in Blog | 2 comments

First Published on Tech Cocktail ( Not long ago, I was approached by one of my students at Northwestern, who was distraught over a situation in a fledging company that she had started in my entrepreneurship class. Her group had decided to split the equity in her company equally – 25 percent each. Now that the class was over, the other three partners weren’t pulling their weight. Two of them were pretty much out of the picture, and the third was only doing a little. However, all of them wanted to keep their share of the equity or sell it at an unreasonable price. The student was on...

Read More