You've spent months building the product, but have you thought equally deeply about your equity? For technical co-founders, understanding how equity works is as fundamental as understanding how your product works.
The Founding Equity Split
Equity should reflect expected future contribution, not past contribution. Several factors matter: domain expertise, time commitment, personal capital invested, critical skills, and existing relationships.
Vesting: Protecting Everyone
All founder equity should vest. The standard schedule is four years with a one-year cliff. Understand single-trigger vs. double-trigger acceleration for acquisition scenarios.
The Option Pool and Dilution
The option pool is created from pre-money valuation, diluting founders, not the incoming investor. Negotiate the size carefully to cover actual 12-18 month hiring needs.
| Stage | Founders | Pool | Investors |
|---|---|---|---|
| Founding | 100% | -- | -- |
| Post-Seed | 70-75% | 10% | 15-20% |
| Post-Series A | 45-55% | 12-15% | 20-25% |
Protecting Your Equity
Hire a startup-experienced attorney. Read every document. Model the dilution math before every round. Negotiate protective provisions. Keep records of everything -- grant agreements, vesting schedules, option exercises.
