Y Combinator Startup Podcast Co-Founder Equity Mistakes to Avoid with Michael Seibel | Startup School
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Nov 16, 2024 
Michael Seibel, a YC Group Partner, shares his expertise on co-founder equity strategies essential for startup success. He emphasizes the importance of fair equity distribution to motivate co-founders and maintain strong relationships. Seibel discusses the dangers of poor equity advice that can lead to conflicts and breakups. He also offers practical tips on managing vesting schedules to avoid common pitfalls that can jeopardize a startup's future.
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Generosity with Equity
- Be generous with co-founder equity to keep the team motivated.
- Stinginess on equity can cause founders to leave prematurely.
Long-Term Motivation
- Distribute equity to motivate your co-founders for the long term, not just the present.
- Consider what will keep them engaged for four years and beyond.
Vesting and Cliffs
- Use vesting and cliffs for all founders, even if you trust each other now.
- Life events can force departures, and these tools protect the cap table.