💥The Impact of Celebrity Investors, Refresh Equity Grants for Founders, How VC Expertise Contributes to IPOs & More
Digesting Insights From the Data
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Should Founder CEOs Get Refresh Equity Grants?
Founder CEOs often face the question: After their initial equity has vested, should they still get refresh grants, or is it overkill? The data from Pave, as posted by Matt Schulman, provides some insights on how common refresh grants are, their sizes, and when they occur:
How many founders: Around 49.1% of private company Founder CEOs have received a refresh grant. The percentage rises as companies scale, from 35% for those raising up to $5M, to 73% for those raising $500M+.
How much: Grant sizes are relatively consistent across company stages. Typically, CEOs receive between 0.7% (25th percentile) and 5.9% (75th percentile) of total ownership in refresh grants, with a median of 2%.
When: Timing varies, 33% of Founder CEOs receive a refresh within six months of finishing their initial vesting, while 29% wait over two years.
✈️ KEY TAKEAWAYS
Refresh equity grants for Founder CEOs are common, especially as companies grow and raise more funds. The timing and size can vary, but it's clear that as the company scales, incentives are refreshed to keep CEOs invested.
Startup Equity Isn’t Cash, So Stop Treating It Like It Is
It may sound obvious, but many early-stage founders and HR teams fall into the trap of treating equity like guaranteed income. When recruiting talent, it’s important to present equity honestly, which Peter Walker illustrates with the example of a Series A company valued at USD 40M: