Re: Company organization and incentive structure for sweat equity

"william...@[EMAIL PROTECTED]
" <william...@[EMAIL PROTECTED]
> wrote:
> Out of the 100% total equity, 5% will be used to raise the initial
> capital.

I agree... put yourself in the investor's shoes. They put in the cash
and assume the risk (outside of sweat equity risk) and end-up with a
5% stake. Doesn't make sense.

But I have made this point before. You should treat equity as gold,
because if you are successful then you will potentially kick yourself
for giving away so much. If you can't be successful without carving-up
the equity, then fine... but be very very prudent.
Can you scale-back operations so that you don't need the initial
capital and can get a couple of years of sales/revenue/etc... Then you
will have a track record and be much more attractive to investors (and
consequently get more money). This is the route that I took.