Co-founders, team & legal

Co-founder agreements & equity

Split fairly, vest always, write it down.

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How should co-founders split equity fairly? For most early teams, split close to equal, an even split signals you see each other as true partners, and long-term contribution rarely matches wh... Beginner 3 resources → What is vesting and why do I need a vesting schedule? Vesting means you earn your shares over time (the standard is 4 years with a 1-year cliff) instead of owning them all on day one. It's the single m... Intermediate 3 resources → Should I use a dynamic equity split like Slicing Pie instead of fixed percentages? Dynamic models like Slicing Pie allocate equity based on actual contributions over time, which is genuinely fairer at the pre-funding grunt stage w... Advanced 3 resources → What must go into a co-founder / founders' agreement in India? Cover equity split, vesting and leaver clauses, roles and time commitment, IP assignment to the company, decision-making and deadlock resolution, a... Intermediate 3 resources → How much equity should I set aside for an ESOP pool for employees? Carve out roughly 10-15% for an option pool before you raise, so early hires get real ownership without diluting you unexpectedly later. In India, ... Advanced 3 resources → What happens to equity if a co-founder leaves early? With vesting done right, they keep only what they've earned and the unvested portion returns to the company, which is exactly why vesting exists. W... Intermediate 3 resources → Should co-founder equity be split before or after we have raised any money, and does it matter that one of us is putting in cash? Split before you raise, when the company is worth nothing and the conversation is cheap. Cash a founder puts in is a loan or priced convertible, no... Intermediate 3 resources → How do we structure equity when one co-founder is full-time and the other is keeping their day job for now? Do not give a part-time co-founder full-time equity and hope it evens out. Either delay their grant until they go full-time, or give them a smaller... Intermediate 3 resources → As a solo founder, how much equity should I give the first employee or advisor who is helping me before I can pay a salary? An advisor is not a co-founder: think 0.25% to 1% on standard vesting, not 10%. An early employee working for below-market pay might get 0.5% to 2%... Beginner 3 resources → What is the difference between issuing shares to a co-founder and giving them stock options, and which should I use in an Indian private limited company? Co-founders should hold actual shares (subject to reverse vesting), not options. Options are for employees. In an Indian Pvt Ltd, you issue founder... Advanced 2 resources → How does founder equity actually get taxed in India, and will I owe tax the moment I get my shares or when I sell? If you subscribe to founder shares at par at incorporation, there is usually no tax event then, tax hits on sale as capital gains. The trap is gett... Advanced 3 resources → One co-founder wrote most of the code before we incorporated. Who owns that IP, and how do we make sure the company does? Right now that co-founder personally owns the code, not the company, which is a fatal cap-table crack a diligence lawyer will find in five minutes.... Intermediate 3 resources → How do we handle deadlock when two co-founders own 50/50 and cannot agree on a major decision? A pure 50/50 split with no tiebreaker is a design flaw, not fairness. Build a deadlock mechanism into the shareholders agreement before you ever hi... Advanced 3 resources → We split equity 60/40 a year ago and it now feels wrong because one of us did far more. Can we still change it? Yes, but only if both of you agree, and the window is closing fast. Before you raise and before real value exists, a re-split is a hard honest conv... Intermediate 3 resources → Do I really need a lawyer and a formal shareholders agreement, or is a signed founders agreement on paper enough for now? A plain founders agreement is fine at day zero to lock intent, but before you raise or hire, you need a proper shareholders agreement (SHA) drafted... Beginner 3 resources → What transfer restrictions should we put on founder shares so one co-founder cannot sell their stake to a random outsider? Lock founder shares down with a right of first refusal (the company and other founders get first dibs), plus a general transfer restriction requiri... Advanced 3 resources → I am a first-time founder outside the big metros and my co-founder is in Bengaluru. Does where we are based change how we split equity or set up the company? Location does not change the split: contribution, risk, and role do. What it does change is logistics. Incorporate one Indian Pvt Ltd regardless of... Beginner 3 resources → How do founder salaries and equity interact, and is it fair for the co-founder taking a salary to still hold equal equity? Salary and equity answer two different questions: salary pays for work now, equity pays for risk and value created over years. A co-founder drawing... Intermediate 3 resources →

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