Five questions (and a tool) to help make your equity restructuring negotiation easier for everyone involved
Navigating the complexities of restructuring your co-founder equity can be daunting. You’ll often hit a wall while looking for advice online due to the inherent confidentiality of equity restructuring negotiations.
As a mediator with eight years of experience guiding co-founder teams and business partners through equity realignments, I can attest to the critical nature of discretion in these processes. However, despite each situation’s uniqueness, there are recurring themes and considerations vital to any co-founder team embarking on a negotiation for a new equity arrangement.
In this article, I’ll guide you through five pivotal questions you should ask yourself individually and as a team during any restructuring of your co-founder equity. Drawing from my extensive experience mediating these discussions among startup founders and business owners, I’ll provide insights and resources that bring objectivity to these otherwise complex conversations.
- The Five Essential Questions for Equity Restructuring
- Delve into five critical questions that every founding team should contemplate during equity restructuring conversations.
2. Centering the Dialogue on Value Contribution
- Direct the discussion toward the business’s needs, emphasizing the past and future contributions each founder has made and will make.
3. Strengthening the Founder Relationship Through the Negotiation
- Leverage the equity distribution talks as an opportunity to reinforce and enhance the collaborative dynamic among the founders. This process isn’t just about numbers — it’s also about fortifying the team’s unity, motivation, and commitment going forward.
4. A Structured Approach to Equity Negotiations
- A practical tool tailored assist founders in navigating the negotiation for their new equity split, streamlining discussion and facilitating more equitable outcomes.