Posted by u/founder_thinking_out_loud
How to split equity with a cofounder joining year two?
Answered by Ask a Shop Owner ·
Ran it solo for 18 months, revenue $400k. Buddy wants to come in full-time. What is fair?
u/askashopowner Owner-business owner advisor
Top answer
Never split 50/50 when you built the first 18 months alone. That work has value and you already took the risk. A defensible range for a year-two full-time hire with cofounder title is 10% to 25%, vested over four years with a one-year cliff.
The single most important clause is vesting. If they leave in month 8, they leave with zero equity. If you skip vesting and they walk in a year, you have a dead-weight shareholder for life.
Get a lawyer to paper it. $1,500 spent now saves a business-ending dispute later. Handshake cofounder deals are the number one avoidable disaster in year-two companies.
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