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Before you start splitting up equity, please take a moment to really think about it.
Rushing into this decision can lead to horror stories—like co-founders feeling undervalued, major disputes over ownership, or even losing control of your company. I hear these stories constantly, and I've experienced them firsthand.
You might have heard of startups that fell apart because they didn’t get the equity split right from the start, and you don’t want to end up in the same boat. Be sure to weigh each founder’s contributions, risks, and commitment. A thoughtful approach now will save you from headaches, disagreements, and resentment. Your company’s future is at stake, so make this decision carefully.
Do any of you want to share how you split equity?
We just launched a great video series on splitting equity. Check it out: https://www.startups.com/videos/splitting-equity
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Ed Kang
Personally, I prefer equal splits. I want to motivate my cofounders to contribute equally, but that's me. Not everybody likes it that way. My way, it takes much longer to assess cofounders properly before pulling the trigger. But I always use vesting schedules and cliffs. I made huge mistakes in the past without them, where I had such a bad divorce with a cofounder that I got ousted as the CEO by the board. Ask me about it sometime.