from Hacker News

How to Split Equity Among Co-Founders (2020)

by dgs_sgd on 4/16/25, 3:21 AM with 1 comments

• by potamic on 4/16/25, 6:02 AM

  Sure, more equity is more motivation, but you cannot make an absolute rule neglecting all context. If someone spent a year building and testing ideas, took a risk to work without pay, it's not unreasonable to expect a greater share in equity. Investors will do better to look at capabilities and creds to understand the value that a founding member is bringing in rather than a number on a table. Besides, as long as we're pulling arguments from our bottoms, one could also argue that equal equity will promote ego conflicts and cause founders to play power games vying for superiority between themselves.

  The question VCs should be asking themselves is, would they be willing to offer same valuation on a series B round compared to their series A? You know, because it's only been an year and all the work is ahead of them, and you want to ensure new investors are also valued and in it for the long haul. That rarely happens. Investors always seem to maintain transactionality for themselves while advocating magnanimity for others. And founders/execs tend to do the same when dealing with their employees, which speaks about a larger problem in human class dynamics.