📖 This article is part 5 of wider series on “How to find a co-founder” – you can check-out earlier instalments here.
Amidst the excitement of finding “your person” to build a startup with, it’s easy to neglect the dry-but-critical legal and financial arrangements that underpin a co-founder relationship.
Yet nearly every founder we spoke to had a cautionary tale about equity splits or legal terms gone wrong.
Spelling out the hard stuff early; equity division, vesting schedules, roles and titles, decision rights, departure clauses – can save enormous pain down the road.
As one founder quipped, co-founder breakups get ugly precisely when these issues were glossed over at the start.
Let’s break down the key considerations:
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1. Equity split – have the tough conversation (and avoid 50/50 by default):
When two or three people first decide to start a company, there can be a tendency to split ownership equally in the name of fairness or avoiding conflict.
Mohammad Al-Razaz warns that this can be a red flag:
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