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ARTICLE · 17 MARCH 2016

Allocating Founder Equity

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There's no legal definition for "founder," but it is one of the most important roles in a startup.

United StatesCorporate/Commercial Law
Gary Schall
Gary Schall
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There's no legal definition for "founder," but it is one of the most important roles in a startup. Designating someone a founder means a lot for the long-term future of the company and for that individual; it is the founders who define and shape the vision for the company. Usually, a startup will name two to four founders.

According to the 2015 CompStudy survey of technology companies in the US, it varies as to whether or not certain roles are given founder status. For instance, survey respondents indicated that the CEO role is given founder status in 72.3% of instances whereas CFO or Head of Finance roles only 9%. (View the full data as a chart generated via CompStudy's online reporting platform using 2015 data.)

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