

Ask HN: 50/50 CoFounder Split - quizbiz

Does anyone strongly suggest against it?
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grellas
A theoretical case is always made against the risk of deadlock, and it is a
very real risk that I have seen lead to disastrous results at times.

With small-business type clients, where buy-sell agreements are the norm, you
would normally want to have some special provisions for breaking deadlocks as
well.

With startups (i.e., ventures that are intended to scale comparatively quickly
over time), though, the norm is not to have such agreements and, indeed, those
agreements will get in the way of normal funding, etc. and prove counter-
productive in most cases.

In practice, then, an overwhelming number of startups do 50/50 type
arrangements and it is very rare in my experience that a problem arises with
this. I would be more cautious if it is an opportunistic teaming than if you
know your co-founder fairly well and have a good sense about his character.
This also assumes that the contributions are equal. 50/50 is a bad idea just
to achieve a sense of comity if one founder is in fact more of a contributor
than the other.

If you do have doubts of any kind, then you can usually achieve formal voting
control even if the equity interests are otherwise equal by using a simple
voting agreement to assure this. In such a case, there is a delicate balance
between formal control mechanisms and the "spirit of the deal," which you
shouldn't violate lest you do damage to the important relationship you have
with someone as important as a co-founder.

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p01nd3xt3r
I think that it depends on what phase of the project you are in when you start
working together.

If you start working on a protytype / v1 together then 50/50 makes sense but
if you have already started / are close to being done w/ a prototype when you
start working together then 50/50 would not make much sense to me.

