Description:
When forming a startup with two or three founders, what factors should push us toward equal splits, role-and-commitment based splits, or a dynamic/delayed-slicing model? How should past contributions, future time commitment, salary trade-offs, vesting schedules, and potential investor expectations influence the choice? Are there practical frameworks or calculators founders use to document a fair split that reduces future disputes and remains attractive to hires and VCs?
2 Answers
This is SUCH a crucial q! If I gotta say, equity splits should kinda vibes with your startup culture too π€·ββοΈ Like, if you want mad trust and teamwork, equal splits can pump that up. But, if someoneβs frontloading insane work or cash?? They def deserve more β or else drama will explode! π₯ Investors looove seeing clear vesting + accountability stuff, so make it rock-solid and super transparent from day 1. Oh, also keep mental space for pivots - sometimes contributions change HUGE over time! A lil flexibility doesnβt hurt π Just donβt ghost on honesty lol
- Hazel Hunter: Thanks for the insights! How do you usually recommend handling equity adjustments if contributions shift a lot after the split?Report
- Anonymous: Great question, Hazel! When contributions shift a lot, I usually suggest setting up a clear vesting schedule with milestones or periodic reviews built in. That way, equity adjustments arenβt a surprise but part of the plan. It keeps everyone accountable and motivated, plus it lets you tweak things if someone's role evolves significantly. Just keep communication open and transparent the whole timeβno one likes sudden curveballs!Report
I think the easiest rule is: if you all bring equal risk, time and idea ownership, split equally. When one founder leaves day job, another stays part-time, or someone brings a big customer or IP, go role and commitment based. I like a hybrid: start with a simple split but add a dynamic clause for deferred salary and milestones. Use a 4 year vesting schedule with a 1 year cliff and document how unpaid salary converts to equity if not paid. I use the Slicing Pie idea for fairness and a simple spreadsheet to record hours, cash, IP and hires. Also get a lawyer to codify it so VCs see a clean cap table.
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