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How should we split equity?

Slide each factor towards whoever brings more. You'll get a fair place to start the conversation, not a final answer.

Who's founding it?

Who brings more of each?

A fair starting point

An equal split

You bring about the same. Equal is the most common split among founding teams, and the easiest to explain to an investor later.

Founder 1
50%
Founder 2
50%
  • Every slider is in the middle. Go through each one together; honest differences now save arguments later.

Whatever you pick, vest it. The usual setup is four years with a one-year cliff: nobody keeps any shares if they leave in the first year, then their share builds month by month.

Agreed on the split? Put the idea to the test before you sign anything.

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How it works

How the split is worked out

Each factor carries a weight, and you share that weight by who brings more of it. The weights are our judgement from working with founders, not research: time they'll put in 25%, money they'll put in 20%, the idea and work so far 15%, skills the business needs 15%, risk they're taking 15%, and customers and contacts 10%.

If one of those matters more in your business, say so and adjust. The point is to have the conversation with real reasons on the table, then write it down in a founders' agreement.

A worked example

Two founders, different strengths

Say Alex is going full time and Sam is part time, Alex had the idea and is taking more risk by quitting a job, Sam has more of the skills the business needs, and money and contacts are about even. That points to roughly 60% for Alex and 40% for Sam, with both shares vesting over four years with a one-year cliff.

Questions

How should co-founders split equity?

Start from what each of you brings: time, money, the idea and work so far, the skills the business needs, the risk you're taking, and customers or contacts. Weigh those, agree the split out loud, and vest it. Say Alex is going full time and Sam is part time, Alex had the idea and is taking more risk by quitting a job, Sam has more of the skills the business needs, and money and contacts are about even. That points to roughly 60% for Alex and 40% for Sam, with both shares vesting over four years with a one-year cliff.

Is a 50/50 split a mistake?

Not if you really are bringing about the same. Equal splits are common and simple. The problems come from splitting equally to avoid an awkward conversation, so talk through each factor first.

What is vesting and a cliff?

Vesting means founders earn their shares over time, usually four years. A one-year cliff means nobody keeps any shares if they leave in the first year. It protects everyone if a co-founder walks away early.

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