How to Split Co-Founder Equity Fairly

Helpful questions to ask about commitment:

• Is everyone in it for the long-haul?
• Will we all work on this full-time or is this a side gig?
• What happens to our equity if our commitment level increases, decreases, or one of us leaves?

Make sure the founder’s shares vest over a period of time (usually four years) and include clear guidelines within the partnership agreement for what happens to a founder’s share should they quit, are forced out, or leave voluntarily.

The five different elements in the Founder’s Pie Calculator are:

• Idea
• Business Knowledge
• Domain Expertise
• Commitment and Risk
• Responsibilities

A lot of the equity conversation comes down to "control" of the business.

Will everyone get an equal say?

How will decisions be made amongst us?

Will you get the resources you need to execute on your ideas?

There are more than one ways to make someone feel valued beyond equity. Give everyone an equal ability to contribute, making sure that the final equity decision you come up with makes everyone feel valued for what they rbing to the table.

Lastly, other things you’ll want to consider include:

• Equity for board members and advisors
• What should happen should an additional co-founder be added
• Creating a partnership agreement that also includes rights of first refusal. Founders can buy back equity shares should a founder leave.