Founders
Founder equity
Founder equity decisions made in the first weeks of a company shape outcomes for years. This hub covers splitting equity between co-founders, vesting, and rewarding advisors and early employees under European company law norms.
Founder equity splits and founder agreements
Founder Equity
Founder equity is the ownership stake held by the people who start a company, usually issued as ordinary shares at incorporation. It gets diluted over time as the company raises funding and grants options to employees.
Equity Split
There is no legal formula for splitting founder equity. Most co-founder teams weigh contribution, risk, and future commitment, then document the split with vesting to protect everyone if circumstances change.
Co-founder Equity
A co-founder equity agreement sets out how shares are allocated, how they vest, and what happens if a co-founder leaves. It is usually a shareholders' agreement combined with employment or consultancy terms.
Founder Vesting
Founder vesting means founders earn their shares over time rather than owning them outright from day one. A standard schedule is 4 years with a 1 year cliff, and almost every institutional investor will require it before investing.
Advisor Equity
Startup advisors typically receive between 0.1% and 1% of the company, vesting over 1 to 2 years, in exchange for ongoing guidance rather than day-to-day work. Grants are usually structured as options rather than outright shares.
First Employee Equity
A startup's first employees typically receive between 0.25% and 2% in options, with the exact amount depending on seniority, role, and how early they join relative to funding rounds. Grants shrink significantly after each round of hiring and fundraising.
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