Properly structuring founder equity is a critical early decision that can significantly impact your startup's future. Here's a crash course on founder equity, founder vesting, and co-founder equity split.
Don't default to 50/50 equity splits. Nearly half of two-founder teams choose uneven distributions based on contributions.When determining equity allocation, consider factors like time commitment, capital investment, and responsibilitiesImplement founder vesting (typically 4-year vesting with 1-year cliff) to protect the company if a co-founder leaves earlyDocument everything—equity allocation, roles, responsibilities, and intellectual property rightsUse specialized platforms like Cake to automatically manage vesting schedules and equity trackingCreating a thoughtful, well-documented equity structure from the beginning helps protect all founders and makes your startup more attractive to future investors.
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