Disproportionate Distribution of Stock Owership Among Initial Founders in Startup Ventures: Survey Results and a Ranking of Factors
AbstractTo date little research has been performed as to how founders of startup ventures determine initial distribution of ownership. In many instances, distribution of ownership is proportionally divided, even though individual contributions to the venture may vary widely. In these circumstances, a disproportionate distribution of ownership would be more reflective of individual contributions to the venture, and more importantly, determine the appropriate incentive (or "reward") for each founder. A survey of business owners was administered, and counter to much of the existing literature, a significant percentage of the respondents divided ownership disproportionately. The survey provides a ranking of factors that can contribute to disproportionate distribution of ownership.
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