Discuss the work first
Describe future responsibilities and time commitments before negotiating percentages. Separate completed contributions from promises about future work. The founder guide offers a practical conversation framework rather than an arbitrary points-based formula.
Define what is being divided
A split of the founder allocation is not necessarily the same as a split of the whole fully diluted company. Identify any hiring reserve and the denominator behind each percentage. Work through the example before making informal ownership promises.
Document change before it happens
Review vesting, departures, decision rights, cash contributions, and intellectual property with appropriate advisers. Keep operating roles and share ownership separate. Clear records help a team understand what changes when a founder’s involvement changes.
Agree on responsibilities before negotiating the percentage.
Go Deeper into Founder Equity
Founder Equity Splits: A Practical Guide to Ownership and Commitment
Work through founder equity splits, future commitments, hiring pools, vesting, departures, and the documents behind an ownership agreement.
Stock Equity Explained: Shares, Rights, and Real Ownership
Understand stock equity, common and preferred shares, ownership percentages, market value, and the questions to ask before interpreting a holding.
Private Equity Explained: Funds, Buyouts, and Ownership Economics
Separate private equity fund interests from company ownership, and examine buyout financing, cash flows, performance measures, fees, and incentives.