Team, Co-founders & Legal

How do we structure equity when one co-founder is full-time and the other is keeping their day job for now?

A starting point

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 slice with an aggressive vesting cliff that only starts when they quit their job. The person carrying the risk full-time should own materially more, and you write down the exact date and conditions under which the part-timer's clock starts.

Go deeper

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 3 link-checked Read Use

Read

📄 Article
✓ Link checked India Free Intermediate

Why we picked it This is the India-specific playbook for exactly your situation: it names full-time versus part-time commitment as a reason to weight the split unequally, and then shows you where that gets written down under Indian law (the founders' agreement plus the SHA, with vesting and leaver provisions, and the Register of Members under the Companies Act, 2013). It also tells you to build in a formal re-split process for when the part-timer's commitment changes, which is precisely the trigger you are trying to pre-agree.

Co-Founder Equity Split in India: How to Decide, Document, and Protect It

From EquityList by EquityList 15 min read

  • Full-time versus part-time commitment at founding is a legitimate reason to split unequally, do not default to 50/50.
  • The split and vesting must live in the founders' agreement and the SHA, and be reflected in the statutory Register of Members, or investors will flag it in diligence.
  • Agree a formal process now to revisit the split and vesting when a founder's commitment materially changes, so the part-timer going full-time is documented, not argued about later.
Open equitylist.co →
📄 Article
✓ Link checked Free Beginner

Why we picked it YC's counterpoint is worth hearing precisely because it pushes back on being stingy: if this person is a real co-founder doing years of work ahead of you, generosity buys motivation across a four-year vest and prevents resentment. Read it against your traction story to decide honestly whether this is a true co-founder (lean generous) or an early employee wearing the title (grant, not founder equity). It is also the canonical source on why a one-year cliff and four-year vesting are non-negotiable.

How to Split Equity Among Co-Founders

From Y Combinator by Y Combinator 10 min read

  • Most of the work is still ahead, so under-paying a genuine co-founder in equity breeds resentment that vesting stretches over four years.
  • A cliff means someone who leaves inside year one walks away with nothing, protecting you from a bad early bet.
  • Use the generosity test as a gut check: if you would not give founder-level equity, be honest that this is an early hire, not a co-founder.
Open ycombinator.com →

Use

📋 Template
✓ Link checked Free Intermediate

Why we picked it This is the concrete clause mechanic your answer needs. Clerky spells out that vesting normally commences on the date shares are issued, and then gives the exact adaptable structure for crediting full-time work: if a founder worked full-time for 12 months before shares were issued, issue 25% fully vested with the remaining 75% vesting over the next 36 months. Invert that logic and you have your part-timer clause: no early credit, vesting commencement date set to the day they quit their job.

What are customary stock vesting terms for startup founders?

From Clerky by Clerky 6 min read

  • Standard founder vesting is four years with a one-year cliff (1/48 per month after month 12), and the default vesting commencement date is the day shares are issued.
  • You can move the vesting commencement date and pre-vest a chunk to credit prior full-time work, which is the same lever, run in reverse, that lets you start a part-timer's clock only on the day they go full-time.
  • Because the mechanic is just a commencement date plus a vested-percentage split, you can adapt it into plain clause language your lawyer drops straight into the founders' agreement.
Open help.clerky.com →

People also ask

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