Equity split between co-founders is one of the most consequential decisions. Unequal splits should reflect contribution differences. The key factors: (1) Idea originator, (2) Full-time vs part-time commitment, (3) Domain expertise, (4) Capital contributed, (5) CEO role. Vesting protects everyone.
ALWAYS have vesting. 4-year vesting with 1-year cliff is standard. Without vesting, a co-founder can leave after 1 month with 50% of the company.
Key Takeaways
- Equity split should reflect contribution and commitment.
- 4-year vesting with 1-year cliff is non-negotiable.
- Reserve 10-15% for ESOP before splitting.
- Use a co-founder agreement — never rely on verbal promises.