creating a valuable, scalable business -- and your aspirations may change, but being aligned monetarily and on life goals provides a foundation to build toward the same end game. Basil says "I know that's not intuitive, but [not doing this] is one of the most common flaws"; 11. Agree on the capital structure at year three. Create your own cap table now: a spreadsheet of how the capital structure/share register might look after two or three investment rounds. It also allows you to see what the investment will do to everyone's equity; Agree on the amount of equity for future employees and directors (create a share option pool -- usually around 10 per cent but in the US it is often higher. I would recommend a minimum of 15 per cent); Allocate your employees or founding team options over four years; You can get away with a Options letter -- include strike price, number of shares (not percentage), vesting schedule (when they have rights to each chunk of the shares); If you are doing equity, not a convertible debt round, consider creating a class of non-voting shares and giving those to your angel round (if they will accept). This means that your voting rights will be different to the total ownership. Useful if, for example, your Series A is not at the stratospheric valuation you hoped and you want to avoid getting close to owning less than 51 per cent between you and your co-founder; 12. Think hard about whether