Essay · 10 min read

Why cofounders should not split equity 50/50

Melissa Kwan · Melissa Kwan (eWebinar founder) Free Intermediate

The first-hand cautionary tale our answer needs. Kwan went 50/50 across two startups over nine years, put in 100k of her own savings, took loans, skipped her salary, and ran BD, sales, and ops while her technical cofounder drew a steady paycheck and coded. When the company sold, the equal split paid him more for less risk, and the resentment ended the friendship. Her fix is exactly our tie-breaker instinct: a 10-minute conversation naming who actually owns what, then splitting on that.

  • "Cofounders" does not mean "equal partners": split on the responsibilities each person truly carries, not on friendship
  • Unequal sacrifice (savings, salary, personal risk) under an equal split breeds the resentment that kills the partnership
  • Have the awkward equity conversation early and explicitly; it takes 10 minutes and saves the relationship
Open on melissakwan.com ↗

The question it answers

  1. How should my co-founder and I split equity, and is 50/50 a mistake?

Read with it

  1. This is the essay to read first, from a YC partner who co-founded Justin.tv/Twitch and has done equal splits across his own... Y Combinator Essay · ~8 minute read How to Split Equity Among Co-Founders Michael Seibel
  2. The India edge on paper. It states plainly that "equal splits are often unfair," then does what the US pieces skip: it turns... Razorpay Rize Article · 12 min read How to Draft a Co-founders Agreement: A Complete Guide Razorpay Rize
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