Entrepreneurs innovate, using new ideas to create value and jobs. But it can be hard to think about the best funding options to sustain and grow your business. Equity Fingerprint is a tool to help entrepreneurs think about this from Day 1.
The Equity Fingerprint of a company is a visual representation of a company’s value and ownership. Like your fingerprint, the Equity Fingerprint of every company is unique. However, unlike your fingerprint, the Equity Fingerprint of your company can change over time.
The Equity Fingerprint tools on this site have been designed to help entrepreneurs and founders to understand the consequences of decisions around investment –additional funding can help you grow, but can also lead to dilution of control and returns from your company. The choice is yours to make.
My dream is that every Business Plan includes an Equity Fingerprint. I hope that you use these tools to grow the business of your dreams. You have a product that people want to buy, now go ahead and plan for growth.
Remember: if you chose to create a unicorn, you require dramatic increases in valuation (normally tied to user growth) between rounds or you might get washed out through dilution.
Philip Baddeley
Entrepreneur, Investor, Educator, Blogger, Publisher
Equity Fingerprint Graphic Novel on Entrepreneurship
Four businesses and four approaches
Equity Fingerprint Guide
While you’re reading consider these key questions:
- Understand your present: are you a solo entrepreneur or working in a team?
are you working in a cluster of other companies working in your area? - Plan your future: do you want a lifestyle company with full control that you can pass on to your family?
Or are you looking to build a global, high growth unicorn with many employees which you can sell?
Equity Fingerprint Journey Planner
- A lifestyle business gives close control, but you will be the one doing all the work. Keeping cashflow positive means constantly selling your product with very little money for new ideas or development.
- A unicorn requires working in a team and sharing your precious idea, but can lead to massive growth, product development, and shared wealth.
Equity Fingerprint Splitter
It is vital to agree on who is in the founding team, and then discuss, argue and agree on how to split the shares.
Recommend against easy splits (25% each) or including freeloaders.
Equity Fingerprint Case Studies
The Equity Fingerprint booklet, Skype Case Study, and 200 equity fingerprints all provide more advice and inspiration using real life case studies of companies I’ve worked with and examined.