I'm launching a small PE firm and need advice on structuring equity for early founding team members.

I don't want to give up equity in the firm for several reasons but I do need to incentivize my team.

Should I offer phantom stock or form a subsidiary LLC and issue stock in that but always own the parent co? Or just offer carried interest for deals they each manage?

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Not sure either those options would be enough incentive.

For context, I'd be offering approx. $7M - 10M across 3 portfolio exits after 5-7 years to a single individual...

...probably more as we grow the portfolio of holdings...

Lawyer up

Hard to comment without more details.
What’s the AUM? How much are you expecting to make in carry? How many ppl at which seniority level?

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