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ENT 404 · Unit 3 of 6

Founder Equity and Early Ownership Design

Entrepreneurial Finance, SAFEs and Cap Tables

Start unit · 4 lessons →

Learning objectives

  • Maintain a fully diluted cap table through priced rounds and SAFEs
  • Apply "Founder Equity and Early Ownership Design" to a real venture decision
  • Contribute to your SAFE conversion model deliverable

Unit overview

#LessonCore idea
1The Strategic Logic of Founder Equity and Early Ownership DesignCore frameworks for this unit
2Methods and Models for Founder Equity and Early Ownership DesignCore frameworks for this unit
3Evidence, Metrics and Assumptions in Founder Equity and Early Ownership DesignCore frameworks for this unit
4Founder Equity and Early Ownership Design: From Analysis to ActionCore frameworks for this unit

Complete all four lessons, then finish unit assessments on this page.

Unit assessment

Complete each section below. Score 80%+ on the quiz to finish this unit's assessment.

50% applied project30% case work20% knowledge checks

Exercises

Apply what you learned in this unit with structured practice.

ExerciseApplied practice: Founder Equity and Early Ownership Design45 min
Complete a focused practice exercise on **Founder Equity and Early Ownership Design**. 1. Choose a real company, product, or situation you know. 2. Apply one core framework from this unit to analyze it. 3. Write your analysis in 300–500 words with a clear recommendation. 4. Cite at least one credible source.

Deliverable

300–500 word analysis document saved to your portfolio under ENT 404.

Rubric

  • • Framework applied correctly (not just named)
  • • Specific evidence from a real example
  • • Clear recommendation with tradeoffs acknowledged
  • • Professional writing with source citation
ExerciseDrill: Founder Equity and Early Ownership Design30 min
Work through the practice problems in the unit lesson without looking at notes. Then check your work against the lesson and write a short reflection: - What you got right - One mistake you caught - One concept to review before the next unit

Deliverable

Problem solutions + 150-word reflection in your ENT 404 workbook.

Rubric

  • • Attempted all practice items before checking answers
  • • Honest reflection on errors
  • • Identifies a specific review action

Case analysis

Analyze a case using frameworks from this unit.

CaseCase analysis: Founder Equity and Early Ownership Design60 min
Analyze a real business case through the lens of **Founder Equity and Early Ownership Design**. Choose a public company event, HBR-style case, or documented decision. **Deliverable structure:** 1. Situation summary (150 words) 2. Analysis using this unit's frameworks (400 words) 3. Recommendation (150 words) 4. Risks and what would change your mind

Deliverable

2-page case write-up in your portfolio.

Rubric

  • • Case facts are accurate and sourced
  • • Analysis uses unit frameworks explicitly
  • • Recommendation is justified with tradeoffs
  • • Risks are specific, not generic

Knowledge quiz

Check your understanding before marking the unit complete.

1. RelayOps incorporates with 10,000,000 authorized shares. Alex, Bea, and Chen each receive 3,300,000 shares. How many shares remain unissued?

2. Each RelayOps founder owns 3,300,000 of 9,900,000 issued shares pre-pool. Founder percentage on issued-only basis is:

3. Standard 4-year founder vesting with 1-year cliff means a founder who leaves at month 10 retains what percentage of granted shares (ignoring acceleration)?

4. RelayOps creates a 15% option pool on a fully diluted pre-money basis before Series A. Why do investors insist the pool be sized before the round?

5. Filing an 83(b) election within 30 days of stock grant matters because it:

6. RelayOps grants advisor Dana 100,000 shares with 2-year vesting. On a 10,000,000 fully diluted cap table after pool refresh, Dana's ownership is:

7. Two co-founders split 50/50 despite one working nights-only for six months before quit. What failure mode does Lesson 1 warn against?

8. RelayOps cap table shows 1,764,706 shares in a 15% option pool. Total fully diluted shares before Series A new money are approximately:

Next unit: SAFEs, Notes and Priced Rounds →