How should co-founders split equity?
Most early fights are about equity. Answer honestly for both founders and get a transparent starting split you can discuss — with the reasoning shown.
Founder A 49.2% · Founder B 40.8%
With 10% reserved for the ESOP pool.
- Founder A
- 49.2%
- Founder B
- 40.8%
- ESOP pool
- 10%
Why
- The CEO role carries extra responsibility (fundraising, hiring, final calls).
Next steps
- Agree 4-year vesting with a 1-year cliff for both founders, in writing.
- Sign a founders’ / shareholders’ agreement covering roles, vesting, exit and IP assignment (get a lawyer).
- Model how a funding round will dilute you.
- Protect discussions with partners using an NDA.
A structured starting point for an honest conversation, not a formula you must follow. Not legal advice.
Common questions
Should co-founders always split 50/50?
Equal splits are common and avoid early friction when both are full-time and equally critical. When commitment or contribution clearly differs, an unequal split agreed early prevents resentment later.
What is vesting?
Founders earn their shares over time — typically 4 years with a 1-year cliff — so someone who leaves early does not keep a large stake. In India this is usually done through a shareholders’ agreement with buy-back or reverse-vesting clauses.
Does cash invested count as equity?
Small amounts are often better treated as a loan or as share capital at the same price. Large cash contributions can justify extra equity; this tool gives cash a modest weight.
Sources and last check
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- Official websites
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