Term Sheets, Taxes, and Options
Great article from Mass High Tech talking about implications of decisions that entrepreneurs make regarding term sheets and options. Find out why generously granting someone a large percentage of your company might have them cursing your name when the next year rolls around:
That means if the company wants to add another founder and give her a third of the equity, she gets a tax bill in the tens of thousands. "Most people involved in startups in this state aren’t looking to get involved to work like a dog at low pay and have a five-figure tax bill," Broderick said. "That’s not how you sweeten the deal."
Hat tip to Chris Austin -- found via his share on OneTrueFan