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A 50/50 founder split is a horrible idea! Don’t do it.

    • 50/50 sucks but for other reasons. 2-person partnerships where each brings equal value do exist. Main problem is people expecting value to be a finite thing at X point, when it is actually spread over (in different concentrations at different times) a moving continuum spread over lifetime of the company.

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  • Agree that 50/50 sucks. In case of disagreement on strategy, 1 person has to prevail, which becomes impossible with 50-50.

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  • What about Steve Jobs and Steve Wozniak? I’d say that was a nice 50/50 partnership. One brought great technical skills to build the original Apple computers, and the other brought great salesmanship skills to sell those computers.

    Bill Gates/Paul Allen was also a good partnership as both had technical skills although Gates felt like Allen wasn’t working enough and tried to screw him out of his shares.

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    • That wasn’t the case at all in Apple. They had Ronald Wayne at the beginning, and even when he left rather fast, they included Mike Markkula – who did an initial investment in the company – in the equation. So it was never 50/50.

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      • They gave Ronald Wayne 10% just to settle any disagreements between them but he sold back his shares. And, of course they eventually took investments to grow their company; that’s a given. What I meant was that when they started out building computers in their garage only the two of them owned the company.

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  • I wouldn’t say 51/49 is a good idea either. Especially when you are starting up, you must work on building consensus, otherwise the guy who’s point of view never prevails will end up leaving.

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  • Completely disagree. If you and your cofounder are resorting to counting shares to resolve differences in opinions you guys are royally screwed. Further if you are both fully committed and just starting out and having the argument of who makes the bigger contribution or whose idea it is or any of that as a way to justify who should have a bigger stake you are going to breed resentment.

    This is all in. Don’t do this to build something small. Do this to be huge. When you go huge the difference between 50 and 45 isn’t material. However if you and your cofounder hate each other due to some deep seeded resentment over ownership you’re taking about the difference between 50 and 0. Keep in mind that if you are going for huge you’re likely raising outside capital. That means you’re going to have a board. That means decisions get made in a rational way that has little to nothing to do with ownership stakes. Once you start growing this no longer becomes about you – it’s about the organization and what’s best for it. That rarely has anything to do with ownership.

    This isn’t where you get greedy. Get greedy about getting the best people. Get greedy about expecting people to put in 1000%. Get greedy about owning your market. But don’t think for one minute that your extra few points of ownership mean shit.

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    • Never fight over imaginary money. When in doubt, be generous. Nothing makes you look like a rookie like squabbling over monopoly money. Either you win big and there’s plenty for everyone, or you don’t and it is worth nothing.

      Always make your partners prove they’re worth it. VEST YOUR FUCKING SHARES. I swear to god, I’m losing patience with all repetition of this same stupid concept.

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  • Prepare for big or selling to big.

    Delaware C corp, preferred and common shares.

    Both founders get 25%of preferred, vested 1% per month.

    This way you are ready made for investors, and if one founder leaves, dies, fail…
    They only take away what is vested.

    Several boutique law firms offer flat rate packages for this sort of thing.

    @kaffegeek

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      • Thanks !

        It is all about structuring in success at inception. If you watch the last 20 episodes of “This week in Startups” by @jason Calacanis, especially the talk given by Scott Walker, you will (should) understand why vesting is crucial.

        @kaffegeek

        P.s. skip the episodes during Launch Fest, focus on talks with individuals.

        I dont mean to troll for Twist there are many other sources out there @niblitz is kinda Kewel.

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