Difference between Stock and Founder shares

It becomes difficult to control contribution fairly when determining equity ownership when there are more founders. Other key employees should receive stock options, not founder shares. The difference between the two is that founder shares are likely to be vested and earned at the beginning of a corporation while stock options are likely to be earned over a period of time. In many companies, 75% of outstanding shares are reserved for founders, 20% for employee stock options, and 5% for a board of directors or a strategic advisory board.

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