Article · 12 min read

Founder Equity Split: Rebalancing Cap Tables

SPZ Legal Free Intermediate

This walks the exact mechanics of moving equity from a 40% founder to a 60% one, and it splits the guidance into two scenarios: before money is raised (surrender-and-reissue shares at nominal value, clean and cheap) versus after (409A valuation, tax exposure, real friction). It is the concrete 'here is how the paperwork actually works' answer, not a pep talk about fairness.

• Before you raise, the fix is a straightforward share surrender and reissuance at nominal value; the window is genuinely cheap right now.
• Once real value exists, the same move triggers a valuation and tax consequences and often needs restarting the vesting clock.
• A stock restriction agreement or amendment resets the vesting schedule so the re-split holds up later.