Forums: Discussions for entrepreneurs and small business.

How do you calculate the ownership percentage?

The partnership contracts we've worked with all take the subjective value of each partner's contribution into account.  If valuation is tough for business with established records and positions; you can imagine how tough it must be for a startup!

That said, there are always non-financial concerns.  When I worked with my first startup, we split the profits evenly between the three of us because we had no idea what our roles would ultimately be, and how much effort each partner would contribute.  This can be adjusted somewhere down the road... and that's where a good partnership agreement comes into play.  It can provide the future-proofing flexibility that a young company requires, saving you all the headache of arguing over when the time comes.