Should I give a co-founder equity or a salary if they join after I've already started?
A true co-founder gets meaningful equity, a cliff, and vesting, and takes real risk with you. Someone who joins for a salary and a small grant is an early employee, not a co-founder, no matter what title you give them. Be honest about which one this is. If you've already built traction alone, a late joiner should get less than an equal split, because the risk they're taking is lower. Don't hand out founder-level equity to feel less lonely.
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This is the tool for the exact fight you are having: it scores each founder across Idea, Business Plan, Domain Expertise, and (crucially) Commitment and Risk, then hands you a number. Demmler states plainly that a founder who is all-in is worth far more than one who will 'sit on the sideline and be cheerleaders,' so you can move the argument off feelings and onto a shared spreadsheet. Run it twice: once at today's real commitment, once assuming the part-timer goes full-time, and the gap is your renegotiation.
Commitment and Risk is a weighted equity factor, not an afterthought: the person keeping a salary scores lower on it, and the math reflects that
Opportunity cost counts. Someone who forgoes a career to join full-time is contributing something the hedging co-founder is not, and the pie should show it
It turns a resentment conversation into a numbers conversation both of you fill in together, which is far easier to survive than 'I feel like I'm doing more'
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.
This draws the exact line you are asking about with Indian numbers: a late-joining co-founder lands at 20 to 40 percent, while even a pre-seed CXO gets 1 to 3 percent and a senior individual contributor 0.2 to 0.7 percent, all out of a 10 to 15 percent ESOP pool. Put your candidate on that scale and the gap between founder equity and an ESOP grant becomes impossible to blur with a title. It also covers the India-specific mechanics: pool sizing, board and shareholder approvals, and vesting under Indian company law.
Late co-founders (joining 6-plus months in) sit at 20 to 40 percent; if you are offering under 20 percent, they are an early employee, not a co-founder.
Early hires draw from a 10 to 15 percent ESOP pool: CXOs 1 to 3 percent, senior ICs 0.2 to 0.7 percent, junior roles under 0.2 percent.
Indian ESOP grants need formal board and shareholder approval and standard 4-year vesting with a 1-year cliff, so plan the paperwork, not just the percentage.
