Resource Contribution and the Distribution of Equity in Startups

• Main Authors: KOTHA, Reddi, GEORGE, Gerard
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Equity stake; entrepreneurship; social interaction; Entrepreneurial and Small Business Operations; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/227; https://doi.org/10.5465/AMBPP.2006.22898143
• Institution: Singapore Management University

Entrepreneurs parse out the equity in their new venture to those individuals who contribute resources toward the formation of the nascent firm. Since the value of non-financial resources is not immediately apparent, the entrepreneur faces the dilemma of equity distribution, to distribute equity even...