Don’t Give Your Company Away in Pieces

Too often people in startups think they’re supposed to give pieces of their company away to people who help them. They aren’t. Or they think it’s clever to pay people for services by giving away pieces of their fledgling company. It isn’t.

Reserve the ownership of your company — called equity — for people who are either long-term partners, critical employees, or investors. Never give equity in exchange for a short-term service. Never give equity as a favor. It’s ownership, and it lasts forever.

by Tim Berry

Full Story: http://timberry.bplans.com/2011/09/dont-give-your-company-away-in-pieces.html