How Much Equity Should You Give Your Startup Team?

Wouldn’t it be great if someone shared a plan to divide your startup stock that actually makes sense. Well, you’re in luck because I’m going to give you a step by step plan you can implement to divide your equity from your co-founders all the way to your early employees.

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But I’m not just going to give you the surface level advice. I’ll also share the advanced insights that most startup CEOs only learn the hard way from vesting traps to refresh grants to why that expensive 409A valuation you’ve been told to get might be completely useless.

Let’s get started and let’s start with step number one on our list…

Step one: Start with the founders.

You have to figure out what the right equity split is between you and your co-founders. Let’s deal with the don’ts first.

You don’t want to have a huge variance between you and your co-founders. Something like 90% for you and 10% for your co-founder is a red flag for everybody involved.

You also don’t want to have a fifty-fifty split between you and your co-founder or a 33%/33/%/33% split. If you have two co-founders, this doesn’t work because it doesn’t represent the differences in your responsibilities and value to the company.