Share Equity Between Founders In North Carolina
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Each co-founder gets an equal share of the company. This method is the simplest as it doesn't require any valuation or calculation. Research from Harvard Business School professors also shows that investors are less likely to invest in startups with a flat split.
I hope it's not too late to convince you that the best way to split equity for three founders is to use a dynamic equity split that will allocate equity based on the actual contributions of the three founders while allowing for the possibility that their individual contributions will be different and may vary over time ...
Many believe that an equal split signifies fairness for all and the majority of founders begin with 50/50 equity splits.
Different ways to split equity among cofounders Equal splits. Weighted contributions. Dynamic or adjustable equity. Performance-based vesting. Role-based splits. Hybrid models. Points-based system. Prenegotiated buy/sell agreements.
Many believe that an equal split signifies fairness for all and the majority of founders begin with 50/50 equity splits.
If you started as a solo-founder and have made progress on the business (especially if you've already raised), you should consider a something along the line of an 80/20 split of founder shares. In fact, the range I'm seeing is anywhere from 5-20% for the 2nd co-founder.
The founders all have different (even if similar) experiences, different opportunity costs, different relevance for the new startup, etc.
The median level of ownership shown is 15% while the average is 20%. Note those highlighted in yellow are more recent IPOs in the past 2 years.
In summary, 1% equity can be a good offer if the startup has strong potential, your role is significant, and the overall compensation package is competitive. However, it could also be seen as low depending on the context. It's essential to assess all these factors before making a decision.
