Glossary · Ownership
What is Equity stake
Definition
The share of a launch business owned by each party. In a backed recruitment launch it defines control, exit proceeds and who decides what.
Applies to: US and UK · Reviewed by James Doyle
In practice
A founder keeping a majority stake keeps direction. What matters more than the headline percentage is the shareholders' agreement: reserved matters, drag and tag rights, and how leaver provisions work.
Compare any offer against what the equity buys — funding, back office, brand, client introductions — not just against the percentage.
Related terms
Shareholders' agreement
The contract between owners setting out control, decision rights, share transfers and what happens when someone leaves or the business is sold.
ReadVesting
Earning equity over time rather than receiving it all on day one, usually across three or four years with a one-year cliff.
ReadEarn-out
Part of a sale price paid later, conditional on the business hitting agreed performance targets after completion.
Read
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