As the leader of a company, you have many responsibilities. Among them is to set a vision for the company. Another is to lead (and motivate) your employees. Another is to attract and retain customers. In most industries, keeping employees happy is often key to keeping customers happy. Because start ups rarely have much cash, it is difficult to motivate employees with high salaries. It is the rare employee who will be excited to work for you on an exciting new project when they see that only you will become rich from their hard work. To solve this problem, you should share ownership with your employees. This creates a bond and common goal between founders and employees. Watch the great talk by Jerry Kaplan on this subject at http://ecorner.stanford.edu/authorMaterialInfo.html?mid=364.

Personally, with every one of Al Davis's start up companies, his goal has been to establish a series of option pools that add up to the exact size of the founders' pool. For example, if he starts with 1,000,000 founder's shares, he would plan to eventually have an option pool of 1,000,000 shares (in practice, you would probably have an initial option pool of, say, 300,000 shares; and later add more pools with each new investment round to accommodate new and existing employees). For him, that sends a subtle message that there is no “we” and “you;” all there is is “we.” Either we all do well, or none of us do well, period. But this is a personal choice for every founder, and it takes self-confidence to make such a decision. If you “need” control for some reason, or if you'd rather have a larger piece of a smaller pie than a smaller piece of a much larger pie, then by all means, fell free to make a different choice.

As a leader of a more mature company, you might have more cash and can afford better salaries. But sharing ownership of the company with your employees still has great upsides of creating long-term loyalty and incentivizing employees to make decisions in the best interests of the company in the long term.

So, in conclusion, the rightmost three-column set on the cap table should show a relative distribution between founders and optionholders that expresses your management and leadership philosophy. And you have complete control over this outcome, as you will see below.

Next, you need to look at the relative relationship between the percentage ownership by the investors vs. that by founders and optionholders. Although some first-time entrepreneurs presume that investors want control, they don't! Investors want financial returns; the last thing they want to do is run your company! Although we will discuss below what you can do to affect the percentage ownership by investors, the bottom line is that you need to offer investors good financial returns. See the help section on the Internal Rate of Return.

Related Questions:

How do I see the cap table?

How do I determine if my cap table is reasonable?

How can I see the IRR my investors will actually receive (if I meet all the assumptions)?