Founder Equity Calculator
Split startup equity fairly based on Idea, Capital, Time, and Risk. Stop guessing, start building.
Recommended Equity Split
| Founder | Score | Equity % |
|---|
*Recommendation only. Consult a lawyer for final shareholder agreements.
Deep Dive: Structuring Founder Equity
1. The "Idea" Myth vs. Execution
A common mistake is assigning 50% or more equity just for the "idea." Ideas are a multiplier of execution. Our calculator weights Capital (10) and Full-Time commitment (8) higher than the raw Idea (7) because building a company requires immense operational risk.
Golden Rule: Avoid exact 50-50 splits. Set up a 51-49 or 55-45 structure to prevent decision-making deadlocks when founders disagree.
2. Vesting Schedules & The "Cliff"
Never give equity upfront. Standard industry practice is a 4-Year Vesting with a 1-Year Cliff.
- The Cliff (Year 1): If a founder leaves before 12 months, they get 0 equity.
- Vesting (Years 2-4): After the 1-year mark, 25% of their equity vests immediately. The remaining 75% vests monthly over the next 36 months.
3. Preparing for Dilution
100% of a grape is worth less than 10% of a watermelon. When you raise a Seed or Series A round, you will issue new shares to investors. This dilutes the founders' percentage (typically by 15-20% per round). Additionally, you must allocate an ESOP Pool (usually 10-15%) to attract top early employees.
The Pre-Incorporation Checklist
Founders' Agreement
Draft a legally binding document outlining roles, equity splits, vesting schedules, and an intellectual property (IP) assignment clause before registering the company.
IP Assignment
Ensure all code, designs, and brand assets created prior to incorporation are formally assigned to the new company entity. Investors will check this.
ESOP Pool Basics
Don't wait until Series A to figure out employee stock options. Agree on a preliminary ESOP pool size upfront (e.g., 10%) so future dilution expectations are aligned among co-founders.