
Ask HN: Sharing equity with cofounders while I fund it 100% - shekhardesigner
I have a startup, three years running now. We have started to generate some revenue to survive and bear the operational cost.<p>When the revenue wasn&#x27;t here - I have invested in it 100% money. I have put in so far around half million USD.<p>It&#x27;s about time I share some equity with my cofounders who are only contributing the human resource. One of them is technical and another looks after managerial aspects.<p>My technical cofounder works around 14 hours a day while the cofounder manager works office hours.<p>Please share you advice on how should I split and share the equity so that they feel valued and respected.
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rman666
That’s a lot of money to have put in without having a plan on how you’re going
to deal with co-founders. I believe current best practice is that 1-4 co-
founders is ideal, with a preference for 2 or 3 co-founders. In these cases
I’ve assumed a near equal split, with one co-founder getting slightly more
equity to avoid deadlocks. For example, a three person startup might have
founder shares split 40/30/30\. I’m not an attorney or tax professional but
I’d suggest this kind of a split with all co-founders having 4-year vesting
with a 1-year cliff. Remember to leave at least 10% of shares for an employee
stock plan. I’d treat your contributions to date as a note payable. Be sure to
consult an attorney and a tax advisor.

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shekhardesigner
In total, we are just three cofounders. I have set aside 15% for employee
stock and rest 90% to be divided by contribution based.

As of now the company incorporation is solely on my name hence I own 100%
shares. None of my cofounders are too pushy.

I want to split in on fair contribution basis.

