You think startup founders should split equity equally?

That's not always the case.This great chart from Carta gives us some context.

Here are the major equity findings:

• Only 41% of 2-founder teams split exactly 50/50

• Very unequal splits for 2 founders are not common

• Only 25% of 3-founder teams split equity 33/33/33

Founder equity split depends on your specific case.

There are two clear takeaways:

𝟭. 𝗧𝗵𝗲𝗿𝗲 𝗶𝘀 𝗻𝗼 𝗿𝗶𝗴𝗵𝘁 𝘄𝗮𝘆 𝘁𝗼 𝘀𝗽𝗹𝗶𝘁 𝗲𝗾𝘂𝗶𝘁𝘆

As long as it works for your specific case and every founder feels good about their allocation. There will be uncomfortable conversations, but don't compromise in order to avoid them. If you have a majorly uneven split investors will question it. Be ready to explain it.

𝟮. 𝗪𝗵𝗮𝘁𝗲𝘃𝗲𝗿 𝘁𝗵𝗲 𝘀𝗽𝗹𝗶𝘁, 𝘀𝗲𝘁 𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘀𝗰𝗵𝗲𝗱𝘂𝗹𝗲𝘀

Founder vesting is your best friend when it comes to protecting the future of your startup. It should be a mandatory term which is crucial especially in founder divorce scenarios. That's a good way to avoid dead equity and it will make investors feel more comfortable.

Your co-founder/s could be your biggest advantage.

Make the terms favorable for all of you.

Focus on making the pie bigger.

Author

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