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by JohnFen 1066 days ago
This is just me, but my personal policy is that all splits like this have to be equal. With two people, 50-50. If one person isn't contributing (or expected to contribute) enough to make that acceptable, that person shouldn't be a partner.

The reason for this policy is that I've seen far too many companies go under because partners start fighting about things like who contributed more and so deserves the larger share. That's utter poison to a partnership (particularly if a partner is a friend, which is a whole danger zone all by itself) and business.

Better just to say "we split everything equally" to avoid fights in the future when circumstances change.

I am not suggesting this is the best way to handle it. It's just the way that I've arrived at, and it's worked very well for me for decades.

1 comments

Yep, that's what I came here to say. Also at this early stage it's a 50-50 split of a whole lot of $0 and it's way more important for the two founders to not have any extra emotional load over "other co-founder has more equity than me" getting in the way of building.

It has personally been easier for me when looking for a co-founder and thinking about equity split to realize whatever is being built is worthless today and is likely worthless tomorrow, and spending time caring about equity for a worthless product gets in the way of creating any sort of value.

This is one of those things where the flower will wither on the vine over fear someone else will get an unfair share of the fruit.

You can't make it without them, so make it with them and then deal with the fallout. If it makes you both millionaires then who cares?

Stop being greedy and selfish before you even have something that is worth anything to anyone else.