The article misses the most important point -- who gets shares and who gets ISOP? In the specific example behind the article, what happens if one of the founders quits? The non-quitting founder is screwed because he gave up half the company equity to a dud partner and has no way to get it back. The company will probably die.<p>Actual issued shares should only go to investors with cash money, tangible assets, or founder(s) with patentable intellectual property. Everybody else (including founders who may have received actual shares for their intellectual property) should get ISOP shares whose present value, when added to their startup salary, would equal the salary they could make in the real world at an established company. The ISOP should have a small cliff so founders who quit after a few months don't get anything.<p>In my startup experience, most of them had issues like this with founders payouts not reflecting their fair contribution. In one case, the founder quit after 18 months but the company hadn't issued ISOP so he got his full cut when the company was sold in 4 years.<p>In another case, founders got stock in direct proportion to what they initially invested in the company. But they burned through the money in three months, didn't get funded, and everybody worked for free for another 12 months before they could start paying salaries. They didn't issue ISOP to make up for the non-paying period, so a founder who invested $20k and worked for free for a year got four times as much as a founder who invested $5k and worked for free for a year.