Should startup founders split equity equally?
"Should" is a tricky word there. I think splitting that a 2-founder team splitting 50/50 is a great way to build a business.
I also think 55/45, 60/40, 58/42, etc are all equally valid ways to slice up the pie.
This topic generated a lot of discussion at a talk I gave to SaaS/AI founders at SF Tech Week, so I thought it would be useful to break out the full distributions in the graph below.
Note that the data reflects 4,448 US startups incorporated between 2022—2024. All of them were likely seeking venture capital even though they hadn't raised any when we took the sample.
𝗠𝗮𝗷𝗼𝗿 𝗙𝗶𝗻𝗱𝗶𝗻𝗴𝘀
Most 2-founder teams do not split equally (only 41% splitting exactly 50/50)
Super unequal splits for 2-founder teams are uncommon
About 25% of 3-founder teams split the pie 33/33/33
The only real takeaway from this chart is that there is 𝗻𝗼 𝗼𝗻𝗲 𝗿𝗶𝗴𝗵𝘁 𝘄𝗮𝘆 𝘁𝗼 𝗱𝗼 𝘁𝗵𝗶𝘀.
50/50 is a totally great way to build a company and a founder relationship - but it’s not the only way. Don't pick 50/50 in order to avoid having difficult conversations with your cofounder.
Second major discussion topic was around vesting schedules. Simply put:
𝗘𝘃𝗲𝗿𝘆 𝗳𝗼𝘂𝗻𝗱𝗲𝗿 𝗺𝘂𝘀𝘁 𝗵𝗮𝘃𝗲 𝗮 𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘀𝗰𝗵𝗲𝗱𝘂𝗹𝗲.
This is a non-negotiable, must-have, deal-breaker equity term. Without a vesting schedule, the founders are setting themselves up for a lot of pain in the event of a founder divorce. Pain that may include their company no longer being an investable startup by VCs.
4-year vest is common but 5 or 6 years is becoming more popular too.
Final caveat: this data is a snapshot of the choices founders make as they begin their journeys. The percentages can fluctuate a lot as you move through funding rounds and other milestones. Many companies will begin with a founding team of 1-2 and then add another cofounder along the way as well.
#startups #equity #founders #venturecapital
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