Co-founder and Equity

Equity and legal specifics vary by jurisdiction and need a qualified lawyer. This skill helps you think clearly about whether to take a co-founder and how to reason about a split - it is not legal, tax, or financial advice. Vesting mechanics, share/option paperwork, and tax treatment differ by country and change over time. Have a lawyer paper the final agreement (see the legal-and-incorporation skill).

A co-founder is the highest-stakes relationship of your startup - more permanent than most marriages, with no easy exit and a four-way split of control, credit, and equity. Choosing the wrong one, or splitting equity on a hallway handshake, is one of the top reasons early startups implode. The cost is asymmetric: the right co-founder roughly doubles your odds; the wrong one, locked in with no vesting, can hold the company hostage. This skill helps you decide if you even need one, evaluate fit honestly, have the conversations everyone avoids, and split equity with reasoning you can both live with for a decade.

The method

Built on the Founder OS scaffold (High tier). Full question lists, frameworks, and scenarios in references/equity-split.md.

Step 1 - Decide if you even need a co-founder, and what gap they fill (ask before assuming)

A co-founder is not a default and not a hiring shortcut. Ask: what specific, critical gap can only be filled by a committed equal partner - not a hire, contractor, or advisor? Name the gap (skills, network, complementary domain, or the sheer stamina of two believers). If you can't name a real gap, you may want a first hire or an advisor, not a co-founder. The worst reason to take one is loneliness.

Step 2 - Evaluate fit before you commit (research before asserting)

Don't marry on the first date. Evaluate across four axes: values (do you agree on why you're building and what "winning" means?), skills (genuinely complementary, not overlapping?), commitment (full-time, financial runway, life stage, risk appetite?), and conflict style (how do they behave under stress and disagreement?). Gather evidence the only way that works: a period of "founder dating" plus a real trial project with a deadline and pressure. How someone handles a hard week together tells you more than any conversation.

Step 3 - Have the hard conversations (a draft is not a decision)

Before any split, work through the "founder prenup" out loud and in writing (full list in the reference): roles and titles, decision rights (who decides what; what needs both of you), time commitment, money (salaries, who's investing cash, what happens with outside income), and the one everyone dodges - what happens if someone leaves, underperforms, or wants out. If you can't have these conversations comfortably now, the partnership won't survive the ones you'll have under real stress.

Step 4 - Split equity with reasoning, not haggling (batch then decide)

Decide the split deliberately, with stated reasoning - don't negotiate it like a flea market. For most teams, a near-equal split with vesting beats a precisely-haggled uneven one: the small "fairness" you win by haggling rarely offsets the resentment it plants, and contributions look very different five years in than at the start. Weigh the factors that actually matter (idea origin, commitment, capital at risk, opportunity cost, critical skill) - but treat large gaps as something to justify hard, not assume. Write down the reasoning, not just the percentages.

Step 5 - Always vest (and paper it with a lawyer)

No matter the split, always vest - typically over several years with a cliff - so a co-founder who walks early doesn't keep a big permanent slice, and the people who stay are protected. This is non-negotiable and protects everyone, including you. Vesting schedules, share/option paperwork, and tax treatment vary by jurisdiction: agree the principle here, then have a lawyer draft the actual documents.

Output

• Co-founder decision: need one or not, and the exact gap they fill (or why a hire/advisor fits better).
• Fit assessment across values, skills, commitment, conflict style - with the trial project / founder-dating evidence you'll gather.
• The hard-conversations record: roles, decision rights, time, money, and the leave/underperform/exit terms - agreed in writing.
• Equity split with written reasoning (defaulting to near-equal-with-vesting unless a gap is genuinely justified).
• Vesting commitment + the note that a lawyer must paper it (route to legal-and-incorporation).

Constraints

• Always vest. No exceptions. A split without vesting is a hostage situation waiting to happen.
• Don't split on a handshake. If the reasoning and terms aren't written down, they don't exist.
• Have the money and leave conversations early - the discomfort now is far cheaper than the dispute later.
• A co-founder is not a cure for loneliness or a substitute for a hire. Name the real gap or don't take one.
• Equity/legal/tax specifics vary by jurisdiction - agree principles here, confirm mechanics with a lawyer. Stay theme-agnostic; the founder supplies the people.

Copy-paste version

Act as a candid, experienced co-founder coach for a first-time founder.
Note: equity, vesting, and legal specifics vary by jurisdiction - tell me to have a lawyer paper the final agreement; this isn't legal advice.
My startup: [ONE_LINER]. Stage: [STAGE]. My goal: [GOAL]. The gap I think I have: [tell me to name it].
Walk me through:
1. Whether I actually NEED a co-founder, and the specific critical gap they'd fill that a hire or advisor couldn't. Challenge me if my reason is loneliness.
2. How to evaluate fit across values, skills, commitment, and conflict style - and design a "founder dating" period plus a real trial project to test it under pressure.
3. The hard conversations to have IN WRITING before any split: roles, decision rights, time, money, and what happens if someone leaves, underperforms, or wants out.
4. How to split equity with stated reasoning - and why near-equal-with-vesting usually beats a haggled uneven split. Make me justify any big gap.
5. Why we must ALWAYS vest (with a cliff), and that a lawyer needs to draft the documents.
Don't let me shake hands on a split with no vesting and no written terms.