The problem you're describing is incredibly common—so much so that I'd say it's the vast majority of startups. Some details might be different but the overall s

The problem you're describing is incredibly common—so much so that I'd say it's the vast majority of startups. Some details might be different but the overall shape is the same. There are a few principles that I think can be helpful here: 1. The vast, vast majority of work remains to be done, and the vast majority of value your startup will have has not yet accreted. Unless your startup depends on some like critical patent or something I'd wager that 90%+ of the value is yet to be created. 2. At exit, a person's equity ownership in the startup should be roughly proportional to how much they value they helped accrete over the life of the company. 3. The above is the only thing that matters. Opportunity cost, professional reputation, relationship status, prior experience—all of those are irrelevant. The only thing that matters is contribution to the value accumulated by the startup over its lifetime. Unfortunately, most big equity decisions are taken at the beginning of a company's life, not at the end--where most of the information needed is not known! Because of that, no matter what you do, you will probably end up with something that is significantly far from optimal. There's just not enough information. Tough luck, them's the breaks, that's the price of success. However, there are a few things you can do now to help guide the process: 1. Agree, explicitly, to the above principles. That is key. 2. Agree, explicitly, to everyone's role and responsibilities over the next year. 3. Given the above, distribute equity in a way that is simple, broadly aligned with the stated principles, and probably over-indexing on "fairness" than accuracy. It's better to make other people a bit richer than they "deserved" and be happy than the opposite. 4. Make sure that everyone's equity has a vesting schedule. The longer the better. 4 years is standard but honestly a bit too short when in the current world startups exit after 10+ years. 5. So that might look (at very first approximation) like you and your cofounder starting with 35% each and your new cofounder with 30%, or 40-40-20, or something like that. 5. Get to work. Good luck!