3 ms·

50/50 Cofounders

31 points by Straubiz 15y ago

kevin_morrill 15y ago
For partnerships where the contribution is at all close (i.e. +/- 10%), I think a 50/50 split has the huge upside of getting both partners completely focused on making the pie bigger. I'd much rather avoid quibbling over a few % of share and get entirely focused on building a better business and also feeling the personal pressure to be contributing my best. If the contribution was wildly different, I think that's certainly a different case.
- hartror 15y ago
  Apart from a monetary contribution by a single co-founder I don't like to odds of uneven ownerships working well. Too much opportunity for bad feelings to develop on either side of the equation.
swombat 15y ago
I don't believe in the one-size-fits-all idea. My thoughts: http://swombat.com/2011/5/10/founder-equity http://swombat.com/2011/5/10/founder-equity
- mduerksen 15y ago
  I think you're onto something there. Maybe your thoughts could be generalized like this: Equity split should reflect the relationship of the co-founders. (EDIT: I just saw you already wrote almost the same) Friendship based on fairness typically consists of mutual respect and confidence in each others capabilities and shortcomings. Such friends have most certainly learned to appreciate their diversity and face another on an equal footing. In this case, a uniform split would be a natural fit - anything else would question the fairness of the relationship. The problem I see is that even in long-time friendships it is not always clear what type of relationship it is. I would claim that in every relationship, all aspects (fairness, personal benefit and more) are present to some amount. And as you say yourself, each member could understand the character of their friendship differently. The implication is: Before deciding how to split, find out in what kind of relationship you are. A russian proverb comes to mind: If you want to get to know someone, go on a mountain hike with him. My russian-speaking friend told me that one, and in fact, we went to the mountains together. Almost died several times. We know each other very well now :)
larrik 15y ago
All of this seems to assume that 50/50 ownership is 50/50 power. That really doesn't have to be the case (and usually shouldn't). I think it was Joel Spolsky who explained that point of view best some time ago. Beyond his explanations, though, the non-tech world has lots of "silent partners," people who may own half or more of the company but give up the actual power of running it. Ideally, you give up some ego, power, and responsibility without giving up freedom and financials.

31 points by Straubiz 15y ago

For partnerships where the contribution is at all close (i.e. +/- 10%), I think a 50/50 split has the huge upside of getting both partners completely focused on making the pie bigger. I'd much rather avoid quibbling over a few % of share and get entirely focused on building a better business and also feeling the personal pressure to be contributing my best. If the contribution was wildly different, I think that's certainly a different case.

hartror 15y ago
Apart from a monetary contribution by a single co-founder I don't like to odds of uneven ownerships working well. Too much opportunity for bad feelings to develop on either side of the equation.

swombat 15y ago

I don't believe in the one-size-fits-all idea. My thoughts: http://swombat.com/2011/5/10/founder-equity http://swombat.com/2011/5/10/founder-equity

mduerksen 15y ago
I think you're onto something there. Maybe your thoughts could be generalized like this: Equity split should reflect the relationship of the co-founders. (EDIT: I just saw you already wrote almost the same) Friendship based on fairness typically consists of mutual respect and confidence in each others capabilities and shortcomings. Such friends have most certainly learned to appreciate their diversity and face another on an equal footing. In this case, a uniform split would be a natural fit - anything else would question the fairness of the relationship. The problem I see is that even in long-time friendships it is not always clear what type of relationship it is. I would claim that in every relationship, all aspects (fairness, personal benefit and more) are present to some amount. And as you say yourself, each member could understand the character of their friendship differently. The implication is: Before deciding how to split, find out in what kind of relationship you are. A russian proverb comes to mind: If you want to get to know someone, go on a mountain hike with him. My russian-speaking friend told me that one, and in fact, we went to the mountains together. Almost died several times. We know each other very well now :)

larrik 15y ago

All of this seems to assume that 50/50 ownership is 50/50 power. That really doesn't have to be the case (and usually shouldn't). I think it was Joel Spolsky who explained that point of view best some time ago. Beyond his explanations, though, the non-tech world has lots of "silent partners," people who may own half or more of the company but give up the actual power of running it. Ideally, you give up some ego, power, and responsibility without giving up freedom and financials.