Founding · How should we split the equity?
Decide who owns and contributes what — while everyone still wants to talk.
The founder equity split is the first real legal decision a company makes — and the one most quietly regretted. Get the allocation, the vesting and the paperwork right at the start, and everything after has room to grow.
Before you split it
A share looks like a reward — it's also a responsibility. Each founder wears more than one hat: shareholder, contributor, decision-maker. So splitting the pie isn't about who gets to enjoy the favour — it's about who does what, and when.
Allocation and role belong together. Get the percentages right but leave the hats unspoken, and the resentment shows up later.
Founding · the split
Five things to settle before you split the equity.
Almost none of this is about the percentages. It's about the logic behind them, and getting that logic onto paper while it's still unemotional.
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Equal splits — or splits based only on who put in the cash today — feel simple, and cause the most regret later. Cash is just one input. Allocate against everything each founder actually brings — idea and IP, full-time commitment, risk taken, and the work still to come — and write the reasoning down while no one is keeping score.
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Put founders on vesting with a cliff. Equity is then earned over time — so a co-founder who leaves in year one doesn't walk away owning a frozen slice of the company everyone else keeps building.
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Roles, decision rights, deadlock, and what happens if a founder leaves or underperforms — papered while you still like each other, not in the middle of the fight.
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Founders — and any early contractors — assign their IP to the company from day one. Otherwise the most valuable thing you have sits with an individual, not the business that's raising money on it.
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Keep an option pool for early hires and headroom for investors. Allocate every share on day one and the first round — or the first key hire — forces a painful renegotiation.
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Who owns the company and who runs it are two different questions. Settle management roles, decision rights, and which calls need everyone's sign-off — so a 50/50 split doesn't become a 50/50 deadlock the first time you disagree.
Beyond the cap table
The founder–investor–employee split is the default. It isn't the only one.
The three-corner template is where most companies start — and on this page, the legal foundation that makes any split hold. The question of fairer, more dynamic ways to share upside and downside is one I work on separately, at Mimicu — my own side project. That's its own conversation.
Visit Mimicu →The honest part
Many start-ups don't fail in the market — they fail among the co-founders.
Co-founder conflict is one of the most common reasons companies come apart — and it usually traces back to equity and who was meant to do what. The cheapest time to prevent it is before anyone has paid for it — in legal fees, in lost time, or in a friendship.
Splitting equity with a co-founder?
Get it on paper before you build.
If you're forming a company or papering a founder split, that's exactly the conversation I'm happy to have — clearly, and up front on cost.
Educational material only — not legal advice. For advice on your own matter, speak to us directly.