A practical framework for splitting founder equity — why 50/50 is usually right, when it isn't, and the vesting and cliff terms that protect everyone.
The founder equity conversation is uncomfortable and consequential. Getting it wrong is one of the most common reasons early companies blow up. Here's how to have it once, cleanly.
Between two cofounders committing full-time from day one, 50/50 is usually the right split. Between three, 33/33/34. It signals partnership and prevents years of resentment over a few percentage points that won't matter after two rounds of dilution.
One founder committed 6 months before the others. One is part-time. One brought material IP. One is a first-time founder joining a repeat founder. In these cases, an uneven split reflects real difference — but keep the range tight (55/45, 60/40) unless one person is objectively a hired helper.
Every founder should be on a 4-year vest with a 1-year cliff, from day one. This protects the company if a cofounder leaves in year one, and it protects each cofounder from the others by forcing continued commitment.
Founders who worked on the company for months before incorporation should get credit — typically 12 months vested at incorporation, then the remaining 36 vesting monthly. Fair and standard.
Double-trigger acceleration (acquisition + termination without cause) is standard. Single-trigger (acceleration on acquisition alone) is harder to negotiate later and can complicate M&A. Set expectations up front.
If a founder leaves before the cliff, the company should be able to buy back unvested shares at cost. Standard, and important — without it, an early departing founder can walk with a large chunk of the company.
Founder equity should be papered before you take any outside capital. Retrofitting a vesting schedule after an investor is on the cap table is possible but painful. Do it clean, upfront, with a lawyer.
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