Cofounder equity and vesting: the complete guide

Equity is the early decision that's hardest to undo. This guide takes it in order — split, vesting, paperwork — with a free tool for each step.

Step 1: Agree what you're rewarding

Most of a startup's value is created after the first day, so weigh future contribution — time commitment, the role the next two years depend on, expertise and capital — above who had the idea. Our article on how to split equity with a cofounder covers the conversation, and should cofounders split equity equally? covers the 50/50 question.

Step 2: Put numbers on it

Score each founder in the equity split calculator. Example: two founders who both go full-time and split product and sales evenly land at roughly 50/50; if one stays part-time until funding, the full-time founder typically ends up nearer 60–65%. Treat the output as a starting point for discussion, not an answer.

Step 3: A technical cofounder joining later

When a technical cofounder joins after the idea stage, founders often reserve a meaningful stake rather than giving a token amount — the product they build is most of the company's future value. See how much equity a technical cofounder should get and how to find a technical cofounder.

Step 4: Add vesting and a cliff

Vesting means equity is earned over time. With four years and a one-year cliff, a founder who leaves at month 11 keeps nothing, and one who leaves at month 18 keeps 37.5%. Try your own schedule in the vesting calculator and read what a good vesting schedule looks like.

Step 5: Plan for dilution

Your split is of today's company. Every round and option pool top-up dilutes all founders together, so model it early with the cap table calculator.

Step 6: Write it down

Roles, decision rights, vesting, IP assignment and what happens if someone leaves belong in a written agreement. Start from the free cofounder agreement template and the cofounder agreement checklist, then have a startup lawyer review it.

Still looking for the right person?

Before any of this, you need a cofounder whose expectations already fit. Start with questions to ask a potential cofounder, or find a cofounder whose equity expectations are in range. This is general information, not legal or tax advice.

The Cofounder for Startups team

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