No hard and fast rules, but generally: founders have to be present before founding (incorporation) - this usually means they will be doing work for free before

No hard and fast rules, but generally: founders have to be present before founding (incorporation) - this usually means they will be doing work for free before that time; in many cases, founders may also need to put in money. (Once you're founded, people can't work for free anymore.) This is what made me technically an early employee rather than a founder of one of my most successful startups - I was one of a handful of peopl who put time, but no cash, into the company - we were the first employees, but that didn't happen until the VC's check was in the bank. (We were somewhat unusually seed-funded by a VC firm.) Those of us who passed on being founders either didn't have the cash or had to keep other jobs until the newco could make a firm offer of employment. (I more or less told them, "Great, I'll help plan and strategize over beer at the pub after work. Other than that, call me when you have money.) Then there are all the differences in stock class, grants vs. options vs. warrants, etc. Usually, though it's pretty clear who were the actual founders - they're the ones with the original idea, who worked (maybe with the help of others) to get it to the point that a company actually could be founded to go forward. BTW, founders aren't permanent - the one I mentioned had to rid itself of nearly a half dozen of them in the startup process. This is usually done with option grants or the like and a solid time-limited no-compete. I know another who's reformed his company three times to force bad people out. It's amazing what good lawyers can do for the people who control the company.