The Startup Equity Calculator
3.9 (286 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
11,314 students enrolled

The Startup Equity Calculator

Learn to use a simple framework and my robust calculator to help you and your cofounders to find a fair equity split.
3.9 (286 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
11,314 students enrolled
Created by Symon He
Last updated 5/2020
English
English [Auto-generated]
Current price: $139.99 Original price: $199.99 Discount: 30% off
5 hours left at this price!
30-Day Money-Back Guarantee
This course includes
  • 4 hours on-demand video
  • 5 articles
  • 12 downloadable resources
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
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What you'll learn
  • Use systematic and fair approach to dividing company equity
  • Understand the two different frameworks for splitting equity
  • Use custom built calculators to arrive at fair splits
  • Understand the key factors in initial equity consideration
  • How to use milestones and actual contributions to calculate a founder's equity
  • Learn which framework is better suited for your situation
Requirements
  • Microsoft Excel 2013+
  • Understanding of basic algebra and percentages
Description

Kristen Barker - 5 Stars

“Clear and understandable. Excellent, useful excel templates. I appreciated the optional modules that clarified terms as well as more advanced information.”

 

Dan Heffley - 5 Stars

“Clear, concise, excellent pacing, with great examples, and numerous other resources.”


Noelima Salama - 5 Stars

“Good presentation and message transmission. Factors in those who already have the knowledge and those who don’t.”

 

Who is the Startup Equity Calculator for?         

            •           New business owners

            •           Startup founders

            •           Co-founders

            •           Entrepreneurs

 

So, you have a great business idea.


You grab your two best friends, get all excited, and then start a company together.

 

In your haste to get started, you and your two cofounders decided to divide the equity evenly in thirds--it seemed the obvious and fair choice at the time.

 

Two months later, just as you're starting to get some traction, one of your friends changes his mind and drops out entirely. But for the work that he did initially, he believes he should still get to keep his 1/3 share of the company.

 

The two of you left are now essentially doing all the work, but for only 2/3 of the company. Still worth pursuing? Maybe. But you definitely won't be happy.

 

'Deadweight' cofounders with significant equity stakes can make it difficult to attract new team members or investors, among other issues.

 

Don't make this easily avoidable mistake. My course and my calculator will allow you and your cofounders to have a collaborative and transparent conversation about how much of the company each person should get.

_____________________________________________

 Juan Campos - 5 Stars

“The resource materials are worth the course ALONE. On top of that, everything is explained clearly and with very good examples. You end up not only owning the knowledge, but also having the toolkit to act upon it.”

 

Guarav Bansal - 5 Stars

“Excellent course and explained in a very simple manner. Perfect use of text, side-video, traversing the excel workbooks, etc.

The excel workbooks are extremely helpful for understanding the concepts and for ready plug n play.

Thanks!”


Look, starting a new venture is hard, but having to figure out what is fair for each cofounder shouldn't be.

 

By taking this course and utilizing my easy-to-use Startup Equity Calculator (UPDATED to handle up to 7 cofounder slots--more than what 99.99% of you will need), you'll learn how to avoid this unfortunate, yet totally avoidable, situation.

You and your team might even have fun with the pie slicing exercise!

 

Through this course, you'll learn what you should factor into your equity pie considerations and how to use a systematic approach for calculating each founder’s fair share, both collaboratively and openly.

 

While this course isn't intended to provide you with the "correct solution,” it will give you and your team a great starting point to move your important conversation forward.

 

More importantly,  it'll make it easier and less awkward to talk about who should get how much and why.

 

Deciding and agreeing on how to divide the initial equity pie is no trivial task, but this tool will help get the conversation going on the right path by forcing you and your cofounders to decide on what are the key milestones for your venture and how each of you are going to be making your contributions.

 

What if your starting a more traditional business?

 

Whether you're going for a high-growth type of startup or a more traditional startup with known benchmarks for revenue and cash flow, I've got you covered.

 

I'll explain to you which of the two frameworks and tools you should use depending on the type of venture you're starting up.

 

Feel free to take a look at the preview lectures to check out the calculators in action, and you'll see how they can help you and your cofounders have a smart equity conversation.

 

Good luck and happy slicing!

~Symon

 


 

Who this course is for:
  • startup founders
  • co-founders
  • entrepreneurs
  • new business owners
Course content
Expand all 48 lectures 04:00:32
+ Too Long Didn't Watch!
6 lectures 31:42

Overview of some useful Udemy features like speeding up lectures, bookmarking, downloading files, and how to to ask questions to the Q&A forum.

Preview 19:13
Udemy Technical Issues
00:55

Quick message for students

Preview 00:53

This is the TLDW (Too Long Didn't Watch) Summary Lecture.  

Preview 08:29
Check out my latest articles
00:45
+ Why a Founder's Pie Calculator?
8 lectures 14:53

What this course WILL and WILL NOT do for you.

What This Course Will (& Will Not) Do For You
01:01

Whatever you do, DON'T divide by N. It's almost certainly going to be the wrong approach for you and your team.

Don't Divide by N
01:43

Course objectives

Course Objectives
00:48

Where are you from? What kind of startup are you working on or will be working?

Why Are You Here?
00:47
Keep This In Mind
00:58

The calculator in this course is inspired by an article by Frank Demmler, which you can find here:

https://www.andrew.cmu.edu/user/fd0n/35%20Founders'%20Pie%20Calculator.htm

For the model in this course, I've made some additions that allow it to take on more use cases.

Preview 03:38

Introduction to the Waterfall Framework

Preview 04:21

Tech, venture funding, IPO, apps, etc...? Go with the Founder's Pie Calculator.

Traditional brick & mortar startup? Go with the Waterfall Framework.

Which Should You Use?
01:37
+ Framework #1: Founders Pie Calculator Considerations
11 lectures 54:50

Overview of the section.

Considerations Overview
00:43

Should the idea be worth something? How much? Find out.

The Value of an Idea
03:25

How to treat cash contributions.

Cash
02:51

Discussion on skills for the founders pie calculator.

Skills
02:10

A list of common contributions teams may want to consider as part of their equity pie slicing exercise.

Other Things That COULD Be of Value
01:07

Milestones and how they're used in the founders pie calculator.

Milestones
01:38

Discussion on vesting--don't use the calculator for that.

Don't Use This for Vesting
02:40

Old version handles up to 5 cofounder slots.

New version can handle up to 7 cofounder slots, which you could use for things like setting aside employee pool, accounting for late co-founders/early key hirers, etc...

UPDATED: Founders Pie Calculators TWO VERSIONS
00:05

A quick walk through of the founder's pie calculator and how to use it.

Founders Pie Calculator Model - How to Use It
16:13

A walk through of the founder's pie calculator with a tech startup example involving 3 founders.

Preview 14:48

A walk through of the founder's pie calculator with a tech startup example where we use two of the "cofounder" slots to track angel investors and a 1st hire instead.

Preview 09:10
+ Framework #2: Waterfall Model
5 lectures 40:46

If distributions of cash flows are expected and there's a need to reward sweat equity, then the waterfall is a great fit.

Why Use The Waterfall Framework?
01:23

Download the waterfall framework file, with all of the formulas. You will be using this for the rest of this section.

Waterfall Framework Model - DOWNLOAD
00:04

Discussion on what is the waterfall and its components.

Preview 11:52

Walk through of the waterfall model and how to use it.

Preview 12:05

Restaurant example using waterfall framework.

Preview 15:22
+ EXTRA MATERIALS: Measures of Return to Understand the Waterfall
11 lectures 48:05

The lectures in this section were originally geared towards real estate but the concepts apply to any business with cash flows out and cash flows in (i.e. traditional business startups).

Measures of Return Quick Caveat
02:20

Quick overview of the topics to be covered in this section.

Measures of Return Overview
00:58

If you aren't comfortable with discounted cash flow, it'll be difficult to fully utilize the waterfall model.

Discounted Cash Flow
05:45
Discount Rate
02:50

The Net Present Value determines value of all future incoming and outgoing cash flows in today's dollars.

In this lecture you will learn about NPV and what this measure says about your project.

**Model Included

Net Present Value
07:43
The Internal Rate of Return measures and compares the efficiency of your investment taking into account the timing of the cash flows.
Internal Rate of Return
02:42

Demo with Excel to show IRR calculations and comparisons. 

Internal Rate of Return Demo
04:33

The Cash Multiple measures and compares the magnitude of your investment without taking time into consideration.

Cash Multiple
02:06

Which measure do you use?

Which to Use?
06:12

Demo showing use of IRR & Cash Multiple.

Which to Use Demo
04:59

Summary of this section.

Measures of Return Summary
07:57
+ EXTRA MATERIALS: Additional Waterfall Example & Explanation
7 lectures 50:17

Watch this before you jump into the rest of the section.

Waterfall Optional Section Intro
01:10

Using the same scenario (a real estate investment) to evaluate and compare the results of 4 different waterfall scenarios.


DOWNLOAD the file here to follow along for the rest of this section.

Waterfall Example Overview
08:31

Using the same example to compare the various waterfall structures, we explore what the returns for each party would look like in a no waterfall scenario.

Waterfall Example - No Waterfall
04:30
Using the same example to compare the various waterfall structures, we explore what the returns for each party would look like in a 2 tier waterfall scenario.
Waterfall Example - 2 Tiers
12:00

Using the same example to compare the various waterfall structures, we explore what the returns for each party would look like in a 3 tier waterfall scenario.

Waterfall Example - 3 Tiers
09:31

Using the same example to compare the various waterfall structures, we explore what the returns for each party would look like in a 4 tier waterfall scenario that uses a catchup.

Waterfall Example - 4 Tiers (catch up)
08:05

Comparing the four waterfall scenarios shows that depending on what your role is and what your expectation for the overall venture return will be, the ideal waterfall could be different.

Waterfall Comparison
06:30