Founder’s Pocket Guide: Founder Equity Splits

How do we split the equity ownership of our startup? This guide provides a framework and process to help startup founders answer this common question. Equity ownership affects the culture and sense of wellbeing of a startup. Founders typically sacrifice a great deal of life opportunities to work on a startup effort. In exchange for that sacrifice, a founder wants to feel the ownership equation with any co-founders is fair. In detail, this Founder’s Pocket Guide walks entrepreneurs though the following elements: • Take The Founder Test to make sure everybody deserves founder status • Review the case for splitting your founder equity into equal parts • Use the Equity Split Scorecard as a fair method to allocate more equity to highly skilled co-founders • Solve common equity problems using founder vesting structures • Answer common equity split questions like IP and founder-investors Note that this guide does not go into how to use equity to attract employees or using equity to pay service providers, advisors, development companies, or other contractors. This guide focuses solely on the best practices of deciding the equity ownership split between the founders of a startup venture.

• Founder's Pocket Guide: Cap Tables
• Founder's Pocket Guide: Startup Valuation
• Founder's Pocket Guide: Term Sheets and Preferred Shares
• Founder's Pocket Guide: Convertible Debt
• Founder's Pocket Guide: Raising Angel Capital
• Founder's Pocket Guide: Stock Options and Equity Compensation
• Founder's Pocket Guide: Friends and Family Funding
• Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist
• The Art of Startup Fundraising: Pitching Investors, Negotiating the Deal, and Everything Else Entrepreneurs Need to Know
• The Startup Checklist: 25 Steps to a Scalable, High-Growth Business