What founders get wrong about equity
Summary
FOMO's CEO reveals counterintuitive equity strategy: they gave non-founders larger equity stakes than typical, ran salary-free for 8 months, and maintain a 17-person flat organization with zero one-on-ones. The key lesson: momentum matters more than conventional startup structure.
Key Takeaways
- Give non-founders equity percentages typically reserved for founders to align incentives and reduce need for early-stage salaries. FOMO's team took no pay for the first 8 months.
- Use equity strategically to defer cash burn during early development. When team members have meaningful ownership, they'll bootstrap longer without salary.
- Maintain flat organizational structure with 17 people and eliminate one-on-one meetings to reduce overhead and improve communication velocity.
- Time your fundraising announcements strategically—wait to announce your previous round completion before launching the next round to build momentum.
- Prioritize momentum above all else when making operational decisions. This principle should guide equity distribution, team structure, and fundraising timing.
Related topics
Transcript Excerpt
We gave non-founders a percentage of the company that usually founders get. For the first eight months of building, no one on our team took any pay. And it was mostly because >> Today we have Paul ah Lian, our co-founder and CEO of FOMO on the show. Now, FOMO is a wild story. Despite the company being a wild success today, they only have 17 team members, no internal hierarchy, and they have no one-on-one meetings. >> One thing that I discovered, if you're trying to raise another round, wait to announce your last round. >> I love non-obvious stories, and when you unpack this one, there are so many gems to uncover. >> Everything is about momentum.…