Peter Thiel’s CS183: Startup - Class 12 Notes Essay Class 12 Notes Essay
Dividing equity between founders A friend asked me recently if I knew of any good guidelines for dividing up equity between founders, and specifically what to do in the case when a co-founder provides seed capital. The truth is I don’t know of any great guidelines – this is seems to me a very case-by-case decison. Obviously the main consideration should be the relative importance of each founder to the future prospects of the venture.
Startup Founder Equity Split Founders frequently ask me to provide guidance on how their startup should split equity between co-founders. My answer is always: (1) It Depends, and (2) Quickly. If you’ve ever hired a lawyer, you will (unfortunately) hear the phrase “it depends” several times.
How to Divide Equity to Startup Founders, Advisors, and Employees Since returning from MIT back in June I’ve been focusing on the growth of the company.
One of the first tough decisions that startup founders have to make is how to allocate or split the equity among co-founders. The easy answer of splitting it equally among all co-founders, since there is minimal value at that point, is usually the worst possible answer, and often results in a later startup failure due to an obvious inequity. Another common “failure to start” situation I see is one where the “idea person” insists that the idea is 90% of the value (and 90% of the equity). Split Equity Between Founders Equally