Startup Equity May Be More Complicated Than It First Appears

While offering equity in your company to employees who provide their time and services can help a new or growing company conserve cash, there are a lot of considerations to think about before giving away a piece of your company.  For those accepting equity in a company, the opportunity to cash in and the prospect of lucrative employment can be very appealing, but this opportunity has to be balanced against time, particularly how long you can go without income and how much time you can devote to the company.  For more on the pros and cons of startup equity, read the full article at Entrepreneur.com written by Susan Johnston.  

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Taking startup equity in exchange for an investment of your time or money and giving equity in your startup business are big decisions.  Be sure to consult with legal counsel and your business’s financial and strategic planners prior to getting into an equity transaction.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.