Team, Co-founders & Legal

How do I structure a startup when I have a non-technical co-founder and a technical one, so the entity and equity reflect real ownership?

A starting point

The entity structure is identical regardless of who codes; what changes is how you document contribution and protect against imbalance. Both founders get common shares, both vest on the same 4-year, 1-year-cliff schedule, and both sign IP assignment so the code and the brand belong to the company, not to whoever built them. Resist the instinct to give the technical founder a huge premium 'because they build the product': early-stage companies die from lack of customers as often as lack of engineering. Write roles and decision rights into the founders' agreement so 'who owns product vs sales' is never a fight later.

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 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

🛠️ Tool
✓ Link checked Free Intermediate

Why we picked it 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.

The Founders' Pie Calculator

From Carnegie Mellon University by Frank Demmler 15 min read

  • 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'
Open andrew.cmu.edu →
📋 Template
✓ Link checked India Free Beginner

Why we picked it This is the checklist and the template in one, written for Indian Pvt Ltd reality, not a US Delaware copy-paste. It walks all nine load-bearing clauses (equity split, 4-year vest with 1-year cliff, good/bad leaver buy-back, roles, reserved matters and deadlock, IP assignment of pre-incorporation work, exit, dispute resolution) and gives a 16-clause template skeleton. Two India-specific traps it flags will save you a real fight: post-exit non-competes are void under Section 27 of the Contract Act, and any share-related term only binds the company once it is mirrored into your Articles of Association (per V.B. Rangaraj v. V.B. Gopalakrishnan).

Co-Founder Agreement for Indian Startups: Clauses and Template (2026)

From iPleaders by iPleaders 25 min read

  • Nine essential clauses plus a full template skeleton you can adapt: equity, vesting, leaver mechanics, roles, deadlock, IP, confidentiality, exit, arbitration
  • Post-termination non-compete clauses are unenforceable in India under Section 27, so lean on in-term restrictions and non-solicit instead
  • Vesting and buy-back terms bind the company only when written into the Articles of Association, not just the founders' side letter
Open blog.ipleaders.in →

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