How to split cofounder equity before resentment sets in

Two people saying they are 'all in' can mean very different things. One may be quitting a job next month. The other may expect to contribute evenings until the business pays a salary. Write down the start date, expected time, responsibilities, cash contribution, salary expectations, and what happens if those plans change.

Do not confuse an idea, a few months of development, or a first customer introduction with the entire future of the company. Those contributions matter, but so does the work still ahead. Ask whether you would be comfortable defending the proposed split to the other founder a year from now if both people deliver what they promised.

YC argues for equal or near-equal splits among true cofounders, emphasizing the years of work ahead and the signal an uneven split can send. That is a useful perspective, not a rule that every team must follow. A late joiner, a part-time role, existing valuable assets, or different financial commitments may call for a different discussion.

If you choose an unequal split, write the reasons in terms both people accept. Avoid a spreadsheet that assigns a permanent percentage to every small task while ignoring who will carry the business over the next several years. If someone is really an advisor or contractor, discuss that relationship directly instead of using a cofounder title to avoid paying or defining the work.

• YC: how to split equity among cofounders

Vesting connects ownership arrangements to continued service under the actual documents. A four-year schedule with a one-year cliff is common in venture startups, but the terms, credit for prior work, repurchase rights, and any acceleration need deliberate agreement. Do not copy the words 'standard vesting' into a message and assume everyone means the same thing.

Walk through an early departure before it happens. Which shares would be vested? What repurchase right would exist? Who must act, by when, and at what price? If the documents provide no repurchase right, do not assume the company can take shares back just because somebody stopped working. Get counsel involved when setting or changing these terms.

A 50/50 economic split does not answer who can sign a contract, hire someone, approve spending, or resolve a deadlock. Discuss board composition, officer roles, approval requirements, and escalation separately. Giving one person an extra percentage point is not a complete governance plan.

Also say what the percentage is measured against. In a simple hypothetical with 10 million issued founder shares and no other securities, 5 million each is 50/50. If the company later issues 2.5 million new shares to an investor and nothing else changes, each founder owns 40% and the investor owns 20%. Real financings can also involve option pools and convertible securities, so keep the denominator explicit.

• Delaware law: directors and management

The conversation is not complete when the percentages look good in a spreadsheet. Have the appropriate approvals, stock documents, payment evidence, IP assignments, and ledger entries completed. If stock is restricted, each recipient should promptly consider the 83(b) decision and its deadline with their advisor.

Corply can help carry out the supported Delaware C-Corp formation and founder-stock workflow once the founders have made their decisions. It does not decide a fair split for you or resolve a disagreement. Bring the agreed facts into the process and preserve the signed record of what actually happened.

• The 83(b) election and transfer-date deadline