Spliting equity in starting a business

Hello all,

I am an engineering student trying to start a startup with my prof.

In the beginning, my professor introduced me to a new product. This product is new for india but, readily available in foreign countries. It is imported in india but in very small quantity because chinese sell it expensive. We want to make it in india. So I presented the idea to our institute's incubator where we got selected and got some grant to explore the idea further. Now we are doing that, exploring about the idea. Now my prof wants to make the founders agreement. So I am in total dillema how to split the shares. Following are the points on basis of which decision needs to be taken:

1. Idea is from my professor and he has the technical expertise. But these technical aspects and manufacturing processes are largely known. Raw materials are going to be imported and machines are going to be purchased domestically. We contacted the supplier just few days back.

2. We do not currently have plan to make investments ourselves for near future. We have financial support from the institute for now.

3. In future, we might go to the investors for investments. That will be done by both of us.

4. We are going to do all the managerial, marketing, production work together. And as he is in governament job, initially I will be the one running here and there.

5. My professor is skeptical about me staying in the company. He thinks I might leave the company. So in the intial offer, he has considered this also.

In the initial offer, he told to give me 5 % annual equity increment for 3 years and 25000 per month salary for 3 years.

I do not think this is fare. So I need your help in deciding this equity split. I want to have important managerial role in the company.

Kindly help.

Thank you.

Lawyer in Hyderabad.Email:ramachary64@gmail.com

You have more flexibility in the initial ownership decision, however, than some concrete designation of ownership from day one.  Vesting simply involves the right of the firm to buyback shares contingent upon certain described conditions.

Conditions that might determine the grant/buyback of shares could include such factors as: the passage of time, the accomplishment of certain tasks, or the occurrence of certain events. In fact, many vesting agreements condition these right upon the passage of time.


If you are going to start a new business then I suggest you to make two or three plans for your business and then apply it.Most of the time I saw on best resume ever written many people share the same idea that I share with you.


Glad to chat your blog, I seem to be forward to more reliable articles and I think we all wish to thank so many good articles, blog to share with us.   Apricot


Nutmeg  It has fully emerged to crown Singapore's southern shores and undoubtedly placed her on the global map of residential landmarks. I still scored the more points than I ever have in a season for GS. I think you would be hard pressed to find somebody with the same consistency I have had over the years so I am happy with that.


Foods for Gut Health  Thank you for the post. I will definitely comeback.


Clove Oil  this blog was really great, never seen a great blog like this before. i think im gonna share this to my friends..


Thyme  I am always searching online for articles that can help me. There is obviously a lot to know about this. I think you made some good points in Features also. Keep working, great job !


Copper  I really enjoyed reading this post, big fan. Keep up the good work andplease tell me when can you publish more articles or where can I read more on the subject?


How To Make Her Horny I just got to this amazing site not long ago. I was actually captured with the piece of resources you have got here. Big thumbs up for making such wonderful blog page!




Your are not logged in . Please login to post replies

Click here to Login / Register  


Search Forum:


  LAWyersclubindia Menu