Term Sheets, Taxes, and Options

Posted on by Tim Rosenblatt

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

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