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  • March 2015
  • Background Note
  • HBS Case Collection

Equity Compensation in Startup Ventures

By: Ramana Nanda, Robert White and Stephanie Puzio
  • Format:Print
  • | Language:English
  • | Pages:14 
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Abstract

Setting equitable and "market" level compensation for founders and early employees of startups is one of the most important elements of a new venture. It is not only central to attract and retain the best human capital for the startup, but is critical to align incentives between investors and management. This note provides a framework to think about compensation in startup ventures and is intended for entrepreneurs thinking about starting a venture, as well as for employees looking to join a young high-potential startup.

Keywords

Entrepreneurial Finance; Equity; Finance; Entrepreneurship

Citation

Nanda, Ramana, Robert White, and Stephanie Puzio. "Equity Compensation in Startup Ventures." Harvard Business School Background Note 815-074, March 2015.
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About The Authors

Ramana Nanda

Entrepreneurial Management
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Robert F. White

Entrepreneurial Management
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More from the Authors

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    Biased Sampling of Early Users and the Direction of Startup Innovation

    By: Ruiqing Cao, Rembrand Koning and Ramana Nanda
    • 2020
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    Financing 'Tough Tech' Innovation

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    • July 2020
    • Journal of Financial Economics

    The Persistent Effect of Initial Success: Evidence from Venture Capital

    By: Ramana Nanda, Sampsa Samila and Olav Sorenson
More from the Authors
  • Biased Sampling of Early Users and the Direction of Startup Innovation By: Ruiqing Cao, Rembrand Koning and Ramana Nanda
  • Financing 'Tough Tech' Innovation By: Ramana Nanda
  • The Persistent Effect of Initial Success: Evidence from Venture Capital By: Ramana Nanda, Sampsa Samila and Olav Sorenson
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