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Best Practices for Equity Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Equity is a key component of startup compensation for founders and employees. While cash may be king in the short term, equity will be worth more in the long run. Here are some best practices for founders to follow: Treat equity as the scarce commodity it is and deploy it strategically and carefully. Avoid using equity for short-term goals such as upgrading websites or purchasing inventory. Consider alternative forms of funding for anything related to cash flow and inventory. Set aside equity to compensate the team and take on potential investors. While it dilutes the founder, it gives the company the capability to grow larger. A smaller percentage of a big number is better than 100% of a very small number. Align your compensation with the employee's needs.\xa0 Know who on the team values equity and will work for it and who prefers cash. If equity is not worth it to them, then reduce their equity share and give it to others who find it motivating. Map out your equity ownership through subsequent rounds of funding. It\u2019s important to know how much equity you are giving away on each round.\xa0 By running a fully diluted cap table on each terms sheet you plan to use, you\u2019ll know how much that raise will cost you. Consider these points in managing equity for your startup. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .