On 18 March 2017, Vircon Legal co-founder Erdem Mümtaz Hacıpaşaoğlu spoke at Koç University’s Zero to One summit, sharing legal insights for early-stage founders on incorporation, equity and building a company on solid legal foundations.
The arithmetic behind every equity conversation
Founders tend to think about equity as percentages, and investors think about it as a share count on a fully diluted basis. The gap between those two views is where most surprises live. Whether a valuation is quoted pre- or post-money changes what a founder keeps, and an option pool created before the round dilutes the existing holders rather than the incoming investor — a term that reads as administrative and is not.
Protective terms compound the same way. Full-ratchet anti-dilution is rare but severe if a later round prices lower, and equity grants promised informally to early team members eventually have to be reconciled with the register. The discipline is simple: model the cap table after each proposed term, not after the round closes. See the investment terms glossary and the ESOP design checklist.
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