How-to guide

How to use the Co-Founder Equity Split Tool

An equity split done badly can end a company. This helps you do it deliberately. Here's how, with three examples.

The co-founder equity split is one of the highest-stakes early decisions — and the one most likely to blow up later. This helps you split it deliberately, across contribution, risk, and role.

What this tool does

You weigh each founder's contribution, risk taken, and role; it turns that into a suggested split you can discuss openly.

Who it's for

Co-founders setting up — or renegotiating — how equity is divided.

How to use it — step by step

  1. List the founders and factors. Idea, work, capital, risk, role.
  2. Weight what matters. Decide how much each factor counts.
  3. Read the suggested split. A starting point for an honest conversation.
  4. Reserve an option pool. Leave room for early hires and future dilution.

How to read your result

A 50/50 split feels fair but can deadlock decisions; a considered split with a documented rationale — and vesting — beats an equal one nobody can defend later.

Worked examples

The same tool behaves differently depending on what you put in. Here are 3 situations.

Two equal founders

Inputs: Similar contribution and risk.

What the tool shows: Suggests a near-even split — with a nudge toward a tie-breaker mechanism.

What to do: Add vesting and a decision-tie-breaker.

Idea vs execution

Inputs: One conceived it, one is building it.

What the tool shows: Shows execution usually deserves substantial weight over the idea alone.

What to do: Value ongoing work, not just the spark.

Reserving an option pool

Inputs: Planning early hires.

What the tool shows: Shows how a pool dilutes founders before any raise.

What to do: Set the pool now so it's not a surprise at the round.

Common questions

Is 50/50 bad? Not always, but it can deadlock — add a tie-breaker and vesting.

Does the idea deserve most of it? Rarely — execution over years usually matters more.

What about vesting? Essential — protects everyone if a founder leaves early.

A helpful estimate, not a guarantee. This tool works only off the numbers and assumptions you enter — it can't see your whole picture. Use it to get oriented and pressure-test your thinking, then sanity-check the big calls with an advisor. It isn't financial, tax, or legal advice.