To split cofounder equity, first agree what you are pricing: time commitment, cash invested, the idea and early IP, skills the company needs, and the role each of you will own. Then choose an equal or a weighted split, put every founder on vesting, and write it all down before any shares are issued.
What should cofounder equity be based on?
On what each of you puts in, now and later. Stripe's guide to splitting equity says a fair split weighs what each founder has contributed and the role they will fill. That means five factors:
| Factor | What it covers | Why it moves the number |
|---|---|---|
| Time | Full-time or part-time, now and next year | Full-time founders give up salary and other options |
| Cash | Money in, personal guarantees, deferred pay | Real money at risk is easy to count |
| Idea and IP | Who had the idea, who owns early code or patents | It matters, but a plan is not a company |
| Skills | Technical, domain or sales skill the company needs | Hard-to-replace skill earns a larger stake |
| Role and risk | Who is CEO, who signs, who raises money | More responsibility and legal exposure can shift it |
Score each factor separately, then compare. You want a split you can both explain two years from now.
Should you split equity equally or weight it?
Split equally only when your contributions really match. Equal splits are also more common than they were: Carta data cited by MAccelerator shows 45.9% of two-person teams chose an equal split in 2024, up from 31.5% in 2015. The risk is that 50/50 hides a real gap in commitment, and leaves you with no tie-break when you disagree.
Weighted splits force the hard talk early, while a mismatch is cheap to fix. The same guide notes that over half of founder disputes trace back to equity and unclear expectations. For the full trade-off, read fair vs equal cofounder equity.
How does cofounder vesting work?
You earn shares over time. The standard is four years with a one-year cliff. Nothing vests for twelve months. At the cliff, 25% vests at once, and the other 75% vests monthly over three years. A co-founder who leaves in month three leaves with nothing, and the equity stays with the people still building. For cliffs, acceleration and edge cases, see cofounder vesting schedules explained.
What should you write down?
Everything you agreed, before shares are issued, in a founders agreement and on the cap table:
- The percentages and how you reached them.
- Vesting terms, cliff and any acceleration.
- What happens to shares if someone leaves.
- IP assignment to the company.
- Who decides what.
Stripe's advice is to document every agreement and get legal and financial advice when you set it up. Our founders agreement templates give you the structure, and a startup lawyer makes it binding.
What if roles change after the split?
Talk before resentment builds. When one founder goes full-time and the other does not, the split stops matching the work. Agree now what kind of change would reopen it. A Founders Align Blueprint holds who owns what, how you decide, how equity works and what happens if someone leaves, signed by both of you and updated as the company changes.
Frequently asked questions
- Should cofounders always split equity 50/50?
- No. An equal split is simple and shows shared commitment, and more two-person teams choose it every year. It can still hide real differences in time, cash, who had the idea and who carries which role. Choose equal only when what each of you puts in, now and later, really matches.
- What is a fair cofounder equity split?
- A fair split reflects what each founder brings: full-time commitment, cash invested, the idea and any early code or patents, the skills the company needs, and the role each will carry. Weigh those together, agree the numbers, and write them down. Fair means you can both defend it later, not that it is identical.
- Do cofounders need a vesting schedule?
- Yes. The standard is four years with a one-year cliff. Nothing vests in the first twelve months, then a quarter vests at once and the rest vests monthly. If a founder leaves early, they keep only what they earned. Set vesting up before any shares are issued, not after a problem appears.
- Can you change a cofounder equity split later?
- You can, but it gets harder once shares are issued and investors are on the cap table. Reopening equity after the fact causes tension and can slow a funding round. It costs far less to spend proper time on the split at the start, and to agree in advance what kind of role change would reopen it.
- What happens to equity if a cofounder leaves?
- Under a normal vesting agreement, unvested shares go back to the company. Vested shares usually stay with the founder who leaves, unless the company has a right to buy them back. The details depend on your founders agreement, which is why departure terms belong in writing before anyone needs them.