Simplifier

Think of starting a company like baking a giant pie from scratch. If you and a friend decide to start the bakery together on day one, you are "co-founders." Usually, the fairest way to do this is to split the pie right down the middle, 50/50. Even if one person had the idea first, you both have to do the hard work of building the kitchen and finding the ingredients, so you want to feel like equal partners in the long journey ahead. If you bring in a "key hire"—someone who joins a little later to help you bake—they usually get a smaller slice. Since they didn't take the very first risk of starting the business when it was just an empty room, their share is often between 1% and 5%. It might sound like a small piece, but if the bakery becomes a world-famous chain, that tiny slice can end up being worth a lot of money. The main goal is to make sure everyone feels like they truly own a part of what they are building. You want your partners and early helpers to care about the business as much as you do. By giving them a fair slice of the pie, you’re making sure that when the business succeeds, everyone celebrates together.

Serial Entrepreneur

For a co-founder, stop overthinking the split. Aim for near-equal—50/50 or 60/40. If you’re haggling over small percentages at the pre-seed stage, you’ve already lost the war. You need total alignment and maximum skin in the game to survive the first dozen pivots. Anything less than a significant stake means they’ll bail the moment the market pushes back. For key hires—your first three to five employees—expect to give up 1% to 5% each. These aren't just workers; they are the engines of your iteration. You’re buying their risk tolerance and their ability to build at 10x speed. If they aren't adding immediate, measurable value to your product-market fit search, they aren't key hires and don't deserve the equity. Regardless of the role, everything must be on a four-year vesting schedule with a one-year cliff. No exceptions. In a "fail fast" environment, you cannot afford a "dead" cap table filled with people who couldn't scale with the company. Equity is a tool for future growth, not a reward for showing up early. Focus on making the pie worth billions, not protecting a larger slice of a zero-dollar company.

Startup Lawyer

For co-founders at the pre-seed stage, the split should generally be close to equal. Investors view significantly lopsided splits as a red flag for future resentment and potential litigation. From a risk mitigation standpoint, the specific percentage matters less than the legal structure surrounding it: every co-founder must be on a standard four-year vesting schedule with a one-year cliff. This ensures the equity is earned over time and protects the entity if a partner departs early. For first key hires, a reasonable range is typically 1% to 5%, depending on their seniority and the degree of salary sacrifice involved. These grants should be issued from a formal Equity Incentive Plan (Option Pool), usually established at 10% to 15% of the total cap table. Using a standardized plan ensures compliance with tax laws, such as Section 409A, and prevents the administrative nightmare of ad-hoc equity promises. Regardless of the specific numbers, your priority is the documentation. You must have a robust Founders' Agreement and clear restricted stock purchase agreements that define acceleration clauses and repurchase rights. Without these contracts in place from day one, you risk "dead equity"—shares held by inactive participants—which can make your startup uninvestable during future funding rounds.