Founder Equity Split Issues?

My co-founders and I set up an equity split with a mix of vesting and role based compensation.  It was finalized last year, and everyone signed off on it.  One of my co-founders is now wanting to increase their equity share on the argument that our respective roles are now not exactly what they were when the  distribution happened.

Any thoughts on how to handle it and convey that the split is not a living document that can be constantly updated (risks are not at all the same?).

  • Happens all the time. If everyone’s in agreement equity splits can always be renegotiated. Often folks are NOT in agreement. Then you need a neutral party or some yardstick to refer to to deal with this.

    • There’s alot of talk about if a founder dies, then the start up

      might die. If— let’s say 6 employees have equity ,and the founder dies, can they not take over the company as well as a co-founder ?

      • That only applies to a sole founder or a founder that drives the vision. Otherwise there’s no reason for the company to die unless the next of kin decides to eff things up.

  • Seems pretty straightforward. If all existing equity owners are in agreement – i.e. said specific co-founder has earned it, all good.

    However, if not then be prepared for the possibility of the co founder suing/leaving/slowing work down/becoming a distraction.

  • Agree something asap and get building. Until then most of the time we all got a % of nothing until some exit event.

    If you can’t agree, drop the co founder and clear the decks.

    Good luck with it .

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