Startups - How to Split Founders' Equity?

Imagine if you are in a founding team of four, how do you split the founders' pie? Example of a scenario might be dividing it equally, just to be "fair". However, almost certainly one of the founders must be thinking, 25% is too little, or "why the other guy deserves 25%?".

In this scenario, you would have just hide your feelings thinking that this issue is too sensitive to bring up. Also, founders might have taking this too lightly as there is not much value or liquidity in the equity yet.

How to be fair?

Founders' Pie Calculator by Frank Demmler is a fair and logical framework for entrepreneurs to give it a thought. Since this is a technology blog, let's drill into this framework from an internet startup's perspective.

First, you need consider the following criteria and plug in the respective weight:
Founders Pie Chart (Criteria & Weight)

Back to the scenario just now, let's assume the four founders are:
F1 - Visionary guy who came out with the whole idea.
F2 - Business guy who prepares the business plan and bringing in sales.
F3 - Technologist who is well-versed in technology and execution.
F4 - Programmer who does all the hard work with the technologist.

Next, evaluate each founders relative importance in all criteria. You will then have a rough idea on how much each founder deserves.
Founders Pie Chart (Score & Percentage of Pie!)

Remember, dividing founders' equity is not a trivial undertaking! Don't be evil as well. ;)

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