Split Equity Without Splitting Up
Calculate fair equity splits based on actual contributions. Includes vesting schedules and what happens if someone leaves.
Rate Each Founder's Contribution
Rate each factor from 0-10. These weights are opinionated: execution matters most (30%), commitment is crucial (25%), while the original idea is worth least (10%).
| Factor | Weight | ||
|---|---|---|---|
Original Idea Who conceived the concept? | 10% | ||
Execution Who's building it? | 30% | ||
Domain Expertise Industry knowledge | 15% | ||
Time Commitment Full-time = 10 | 25% | ||
Capital Financial contribution | 10% | ||
Network Connections & relationships | 10% |
Recommended Equity Split
Our Recommendation
Consider an equal split. When contributions are similar, equal splits reduce friction and align incentives. The difference in your scores is less than 10%.
Vesting Schedule
4 years is the industry standard.
No equity vests until cliff is reached.
| Milestone | Founder 1 | Founder 2 |
|---|---|---|
| Start | 0.0% | 0.0% |
| Month 12 (Cliff) | 12.2% | 12.8% |
| Year 2 | 24.3% | 25.7% |
| Year 3 | 36.5% | 38.5% |
| Year 4 | 48.7% | 51.3% |
Departure Scenario
Advisor Equity Guidelines
| Involvement | Equity |
|---|---|
| Standard advisor (monthly calls) | 0.25% |
| Strategic advisor (weekly involvement) | 0.50% |
| Expert advisor (domain expertise) | 0.50-1.0% |
| Board advisor / Chairman | 1.0-2.0% |
Advisors should also vest, typically over 2 years with no cliff.
Early Employee Guidelines
| Hire # | Equity Range |
|---|---|
| First hire (pre-seed) | 1.0-2.0% |
| Employees #2-5 | 0.5-1.0% |
| Employees #6-10 | 0.25-0.5% |
| Post-Seed employees | 0.1-0.25% |
Ranges depend on role, seniority, and stage. Executives get higher end.
The Conversation Most Founders Avoid
Equity conversations are uncomfortable. Most co-founders either avoid the conversation entirely (defaulting to 50/50) or have it once and never revisit. Both approaches cause problems.
The 50/50 trap: Equal splits feel fair in the beginning when everyone's enthusiasm is high and contributions are theoretical. But six months in, when one founder is working 80-hour weeks while the other has a "day job" commitment, resentment builds. The working founder feels cheated; the other feels attacked for circumstances beyond their control.
Our weighted approach values execution over ideas. The original idea is worth only 10% because ideas are cheap—execution is everything. What matters is who's actually building the company day-to-day, who has relevant expertise, and who's fully committed.
Have this conversation early, document it, and include vesting. Vesting protects everyone. If someone leaves after 3 months, they shouldn't walk away with 50% of a company they barely contributed to.
Why Vesting Is Non-Negotiable
The Cliff Period
The cliff (typically 12 months) means no equity vests until you hit that milestone. If a co-founder leaves at month 11, they get zero. This protects against early departures and ensures commitment.
After the cliff, equity vests monthly. In a 4-year schedule with 1-year cliff: 25% vests at month 12, then ~2% vests each subsequent month.
Single vs. Double Trigger
Single trigger: Accelerated vesting if the company is acquired. Founders get their full equity immediately upon sale.
Double trigger: Acceleration requires both acquisition AND termination. Preferred by acquirers because it keeps founders incentivized to stay.
Our recommendation: 4-year vesting, 1-year cliff, double-trigger acceleration. This is investor-friendly and protects all parties.
5 Equity Mistakes That Destroy Co-founder Relationships
Giving equity without vesting
If a co-founder gets 40% outright and leaves after 2 months, they still own 40%. Always vest. No exceptions. Even if you're best friends.
Splitting equity before knowing who does what
Don't finalize equity splits in week one. Work together for 2-3 months to see who actually contributes before making it official.
Ignoring the "time commitment" conversation
Is everyone full-time? Part-time with a day job? This changes everything. A founder working 20 hours/week shouldn't get the same equity as one working 60.
No documentation
Handshake agreements don't survive stress. Get a lawyer, sign a founders' agreement, file 83(b) elections. The cost is nothing compared to a lawsuit.
Forgetting about the option pool
You'll need 10-20% for employees. If you split 50/50 between founders, there's nothing left. Plan for this from day one.
Related Resources
Founder Equity FAQ
Should co-founders always split equity equally?
No. Equal splits make sense when contributions are truly equal—same time commitment, complementary skills, similar experience. But if one founder is working full-time while another has a day job, or if one brings significantly more capital or expertise, unequal splits may be more appropriate. The key is having an honest conversation about contributions.
What if a co-founder wants to leave before vesting completes?
They keep whatever has vested, and the unvested portion returns to the company. This is why vesting exists. If they leave before the cliff, they get nothing. After the cliff, they keep what they've earned. The returned equity typically goes into a pool for future use.
What's an 83(b) election?
When you receive stock subject to vesting, you can file an 83(b) election with the IRS within 30 days. This lets you pay taxes on the stock's current (low) value rather than its future (higher) value as it vests. Missing this deadline can cost you massive tax bills. Always file 83(b) for founder stock.
How much equity should I save for employees?
Plan for a 10-20% option pool. You'll need this for early hires and executives. VCs often require you to set this aside before they invest (which dilutes founders, not them). Build it into your planning from day one.
Can we change the equity split later?
Technically yes, but it's extremely difficult once people have vested equity. This is why you should wait a few months before finalizing splits, use vesting to protect against early departures, and have honest conversations upfront. Changing splits later usually requires someone to voluntarily give up equity—good luck with that.
Should the "idea person" get more equity?
Not necessarily. Ideas are worth very little—execution is everything. Our calculator weights the original idea at only 10% because countless successful companies pivoted from their original concept. The people building the company day-to-day matter more than who had the initial spark.