Tactical insights for first-time founders to outsmart the burn, the churn & the breakdown.

Hey Founder,

You build something great…
but end up with a tiny slice because you gave away too much equity, too early, to the wrong people.

Or you keep a big stake…
but miss out on talent who could’ve made it 10x bigger because equity “felt expensive.”

Most founders don’t decide based on impact.
They Google “how much equity to give,” see 0.25–1%, and go with their gut.

A year later, someone who joined three calls owns the same as the engineer who pulled 80-hour weeks.

Equity feels cheap when it’s a DocuSign link.

It gets expensive when there’s a real exit on the table.

In this issue: how to give equity to early employees, advisors, and helpers - so you scale smart, without overpaying for the wrong impact.

The worst equity mistakes don’t happen at big funding rounds. They happen early - when it’s just you, a couple hires, a helpful advisor… and a cap table no one thinks will matter.

A startup lawyer told me about a founder who gave an advisor 20%, no vesting. Two years later, the advisor was gone. The equity wasn’t.

When they tried to raise, investors saw a ghost owning 20% and walked. No capital. No exec hires. No way forward. That equity should’ve gone to leaders and key hires - not a rushed, early promise.

You see it at scale too.

At Zynga, equity was the easiest thing to hand out.

By IPO, millions in stock sat with people no longer there.

Management asked employees to give it back, or be fired. Trust collapsed. The fallout became legend.

Same story, every time:
Equity feels cheapest when you’re desperate to keep people. It feels most expensive once you win and realise who you overpaid.

That’s why equity isn’t a Series A clean-up.

It’s a Day‑1 design decision and only works when tied to real contribution, not guilt or guesswork.

Because your cap table is your story.

It tells investors, your team, and future you what actually mattered.

Your cap table defines your future options. A clean one gives you flexibility: to hire, retain, reward, or take a small secondary. A messy one locks you in - with no room to correct, and no leverage to move forward.

Most first-time founders (95%!!!) regret at least one equity decision - not because they were greedy, but because they misunderstood what equity is really for.

Equity isn’t a stand-in for salary or a thank-you for someone who offered to “help.” It’s a strategic tool meant to unlock growth, retention, and leverage you can’t afford in cash. Used well, it should make what you still own more valuable.

Problems start when equity becomes a shortcut, a way to avoid hard conversations, delay hiring, or paper over a shaky model. At that point, it stops being a tool and starts becoming a long-term drag.

So instead of asking, “Is 0.5% fair?”, try asking:
Does this person truly need equity - or just cash?
And will this grant make my remaining stake worth more or less?

Equity only works when it grows the pie enough that your smaller slice is actually worth more. If it doesn’t, it’s not a smart trade - it’s a silent cost.

Before you talk numbers, define whether someone is a co-founder, a builder, or a helper. If you skip this, you’ll end up overpaying helpers and under-rewarding the people actually building the company.

Ask:
“If this person vanished 12–24 months from now, what actually happens?”

Don’t go grant-by-grant without knowing your upper limit.

At an early stage:

If a grant pushes you beyond that, they’re probably a contractor, not an owner.

Equity is for builders, not helpers, and that should be reflected in the structure.

Use standard vesting (4 years, 1-year cliff, monthly or quarterly thereafter), and make sure your first 10 employees don’t accidentally take 10%+ of the company.

If someone in a non-exec role is getting 2–3%, they should be absolutely pivotal.

Only give equity to advisors who act like builders.

Anyone asking for 1% or more before Series A should be an outlier, not your default.

Before granting anything 0.5% or higher, pause and ask: “If this person joins and things go well, is my remaining stake likely to be worth more or less?” If the answer isn’t clearly “more,” cash is probably the better move.

A founder DM’d me:

Here’s the honest answer: Cut the ads.

If there’s no clear path to payback, no data showing customers return and become profitable, then you’re not buying growth. You’re just renting revenue and keeping the debt.

And because the cards are personal, the liability is yours. With $50k already on the line, the smart default is to pause or sharply reduce spend, only test small from business cash, and focus on paying it down.

You treat it as “startup risk” only when you can say:
“A customer we acquire for $X brings in 2–3X over 6–12 months.”

Until then, every extra dollar is likely digging the hole deeper.

Send it my way, just hit reply.

A few sharp picks from this week:

Before you go…

Equity isn’t about being generous. It’s about being intentional.

Every grant is a bet on leverage, that this person will turn a smaller slice into more value for everyone. When that’s true, dilution is a gift. When it’s not, it’s a quiet, permanent tax.

Founders who win aren’t the ones who gave away the least, but the ones who gave equity well.

Value contribution, not hope. That’s the real moat.

See you next Thursday,

— Mariya

Hit reply and let me know. I read every single one (for real).

Hey, I’m Mariya, a startup CFO and founder of FounderFirst. After 10 years working alongside founders at early and growth-stage startups, I know how tough it is to make the right calls when resources are tight and the stakes are high. I started this newsletter to share the practical playbook I wish every founder had from day one, packed with lessons I’ve learned (and mistakes I’ve made) helping teams scale.

Mariya Valeva

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