How Do You Divide Equity? My Definitive Guide

How do you divide equity between co-founders? This is my definitive guide to splitting equity. I’ll cover everything to do with equity splits in this video. There are 8 different topics regarding equity we will talk about. So grab a pen and some paper to take notes.

The bottom line is you do two things: Be fair and Be generous then you will be on the right track to making equity a tool for your company’s success.

Here's what we'll cover in this video:

1. Why do you give equity to your employees and co-founders?
2. How should you think about equity splits
3. How much equity should your co-founder(s) get
4. How do you protect yourself against problems
5. How do you deal with money you and your co-founders put into the company, and how does this translate into equity?
6. What if you and your co-founder(s) can’t agree on equity
7. What about investors? How do you deal with them? How much should they get?
8. Preferred versus common stock
9. How should you deal with employee stock options

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[wasikhan]

This is a really great guide! No hullabalo, just straight up actionable information!

[addarshchandrasekar]

Thanks Brett for the wise words! Can you share an example with equity dilution including employee options at each stage until IPO and pitfalls at each stage ?

[DanMorin]

Thank you Brett for making this video.