Equity split 50/50 and past contributions
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I've checked other questions but none cover the topic of past contributions. I'm wondering how much weight does time spent before incorporating matter.
Do Founder A earlier contributions have enough weight to change the ownership split?
Is a 50/50 situation stable enough for decision making in the long term considering there are clear roles & responsibilities?
Co-Founder Equity Founders Agreement Shares
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1 Answer
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Joel Spolsky goes through a plan along these lines in great detail here:
Forming a new software startup, how do I allocate ownership fairly? As long as it doesn't cause resentment, 50/50 could work with some points you need to remember:
- Even starting at 50/50 doesn't mean it will stay that way for long. For example, the accelerator will take a 4-10% cut.
- Have a vesting schedule based on time with the organization.
- No one gets their shares up front.. though the vesting schedule could have started in the past. This is called "backdating" and you must absolutely talk with an attorney to make sure it's done properly.
Most likely the accelerator has a lawyer or three on staff to advise on these exact issues.
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Thanks for the reply, but doesn't answer the questions. We do have an attorney from the accelerator, but I want to have a better insight and do my homework before. The accelerator takes 8%, but this still makes the split equal between cofounders. – Jean Pierre 12 years ago
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"As long as it doesn't cause resentment, 50/50 could work with some points you need to remember:" – Casey Software 12 years ago
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