Dividing Equity among Co-founders

Image by mohamed Hassan from Pixabay

There is no one best way to divide equity among co-founders and set founder salaries.

I am generally an advocate of one for all and all for one.  Keep the equity equal among founders and keep your base-salaries the same.  I have found it tends to reduce these issues as distractions while creating a stronger sense of team.  Is it perfect?  Nope.  But, it has worked pretty well for me.

Here is a good summary of the pros and cons of a fixed approach versus a more dynamic, situational approach.

The key is to have a serious discussion among co-founders before the business is up and running, when everyone is still friendly and everything is still more or less hypothetical.  Talk through the various models and don’t come to a resolution until you reach full consensus among the founders.