Disproportionate Distribution of Stock Ownership Among Initial Founders in Startup Ventures: Survey Results and a Ranking of Factors to be Considered

To date little research has been performed as to how founders of start-up ventures determine initial distribution of ownership. In many instances, distribution of ownership is proportionally divided, even though individual contributions to the venture may vary widely. In these circumstances, a disproportionate distribution of ownership would be more reflective of individual contributions to the venture, and more importantly, determine the appropriate incentive (or “reward”) for each founder.   A survey of business owners was administered, and counter to much of the existing literature, a significant percentage of the respondents divided ownership disproportionately.  The survey provides a ranking of factors that can contribute to disproportionate distribution of ownership.  To read the full article please see, Journal of Small Business Strategy, 20 (2) Winter, 2010.