Preview Mode Links will not work in preview mode

Investor Connect Podcast

Investor Connect is for investors interested in learning more about investing in startup and growth stage companies. Experienced investors share their experiences and advice with those who are considering an investment into startups and growth companies. It includes a podcast series of interviews with investors to inform others about the process of funding startups as well as a resource list and a discussion board.  

Topics include sourcing, analyzing, and researching companies. Other topics include valuations, terms Sheets, board of directors, board of advisors, due diligence, syndicates, venture capital, angels, angel networks, family offices, crowdfunding, exits, and more.

Investor Connect is a community program. We welcome your suggestions for speakers and topics which you can send to us through the Contact page. No registration is required to use the resources.  Discussion boards are available to post and answer questions about startups and growth company investing through which registration is required.

Investor Connect is a program under the Texas Open Angel Network which is a 501(c3) non-profit dedicated to the education around startup funding.

Disclaimer: Hall T. Martin is the Director of Investor Connect which is dedicated to the education of investors for early stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Dec 29, 2023

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. 

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’s important to know how much equity you are giving away on each round. 

By running a fully diluted cap table on each terms sheet you plan to use, you’ll know how much that raise will cost you.

Consider these points in managing equity for your startup.


Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.


For more episodes from Investor Connect, please visit the site at: 

Check out our other podcasts here: 
For Investors check out: 
For Startups check out: 
For eGuides check out: 
For upcoming Events, check out  

For Feedback please contact   

Please follow, share, and leave a review.

Music courtesy of Bensound.