| Note that the below makes big assumptions as to what the situation looks like. I read a lot between the lines, so take the words below with a grain of salt. I won't sugar coat it: it's a tough situation to be in because you need to fix a potential mistake that was done a while back and doing so, while going in the proper direction of fairness, can be interpreted as unfair by other parties. First I would have a discussion by putting yourself in the shoes of the company, not your personal shoes, as you have a fiduciary duty to do it. This removes your personal interests from the discussion, as it should, and will make it less personal (as it should too). From that perspective, the company needs to do what's best for itself, and giving away significant equity for little in return doesn't seem to fulfill that duty. I imagine your cofounders also have a fiduciary duty to make decisions that are aligned with the company's interests, even if these decisions aren't the best for themselves. This is a good test for that. If the contributions of your other co-founders are minimal, then it needs to be reflected in the equity allocation. Perhaps an acceptable solution would be to turn these "future founders" into advisors. You can use the Founder Advisor Standard Template as a simple framework to allocate shares vs contributions (see https://fi.co/fast ) - this will keep them engaged, compensated for their current contributions, and also gives the company a way to have a history with them to decide whether it makes sense to turn them into co-founders later or not (whether you want to call it co-founders when that happens is irrelevant). What's nice about the FAST template is twofold: first, it formalizes the type of work that advisors do (in terms of workload too) and it relates that to a specific percentage of equity, allowing you to map their levels contributions to a more reasonable compensation. Second, it was not engineered by you: you have not written the template so you cannot be accused of influencing it for your benefit. Lastly, a lot of this depends on how the relationship between the founders is. You may find out that things don't work out as easy as you'd want to, and that's a lesson that's better to have earlier than later. Conversely, you may find out that your cofounders agree and perhaps were a bit uneasy by the unfair allocation. Good luck! |