Other than the venture team, equity is allocated to the Prototyze CXOs, the Business Services team (Innerheads CXOs), Gourav Jaswal and Prototyze.
This allocation broadly follows the principles as outlined below:
- Roughly 5% for Prototyze CXOs [This could be as low as 3% or as much as 8% depending upon the number of CXO’s and their expected and actual contribution]. Why are they assigned equity?
- Because of the work they contribute [Their contribution is relative to work of venture leadership does. The more capable venture leadership the less the CXOs in Prototyze will have to do].
- Because we need to recognize the difference between what that work is worth and what the Prototyze CXO’s are actually paid, which is much lower.
- BUT do note that this is NOT equity coming to Prototyze. This is to an individual called Hatim Kantawalla or Mohan Krishnan. This is done for recognizing their INDIVIDUAL sacrifice of taking a below-market salary. PLUS for ensuring their motivation and alignment with the interest of the venture across years.
- Roughly 5% for Innerheads CXOs [This could be as low as 2% or as much as 6% depending upon the number of CXO’s and their expected and actual contribution] Why are they assigned equity?
- Because of the actual work they do AND the difference between what that work is worth and what they are paid for it.
- This will vary less relative to the work that the venture leadership does because a Chief Product/Planning Officer at Prototyze will need to do less if there is a very capable CPO + CTO at an upcoming venture. But Head of HR will need to contribute roughly the same till the time a venture grows enough to have its own HR head.
- BUT do note that this is NOT equity assigned to Innerheads. This is to an individual called Anupama Beri or Pramod Sultania.
- Between 5 to 10% for Gourav Jaswal. Why? Because of the actual work he does. AND given the difference between what that work is worth and what he is paid for it by the venture.
- 30-40% held by Prototyze. Why?
- Because Prototyze provides a value above and beyond individuals. It is the entity (as opposed to an individual) which encompasses the resources, the reputation, the network, the brand, the track-record.
- Prototyze is currently a privately-held company controlled by Gourav Jaswal. In which case, how is it different from assigning equity to Gourav Jaswal? Simply this: Gourav Jaswal is an individual who will remain a private individual. He is not ‘shareable’. He is not ‘investible’ or ‘buyable’. He is not ‘exitable’. But Prototyze is an entity whose resources can change, whose investment structure can change, whose capital reserves could change, whose shareholding could change.