I’ve seen three founding teams implode over equity.

Same story each time. Started as friends. Didn’t discuss hard things. Problems festered. Relationships ended.

Here are the conversations you need to have early.

The Split Conversation

Equal splits feel fair. They’re rarely right.

Questions to answer:

• Who brought the idea?
• Who has the critical skills?
• Who is contributing full-time vs part-time?
• Who is taking more risk (leaving a job, investing savings)?
• Who will do the hard work after the excitement fades?

Equal contribution deserves equal equity. Unequal contribution doesn’t.

Most founding teams have different levels of commitment, skill, and risk. Acknowledge it.

The Vesting Conversation

All founder equity should vest. Including yours.

Standard: 4-year vesting with 1-year cliff.

If someone leaves after 6 months, they shouldn’t walk away with 25% of the company. Vesting protects everyone.

I’ve seen founders resist this. “We’re committed, we don’t need vesting.”

Then someone leaves. And takes 50% equity. And the remaining founders have nothing to give future hires or investors.

Always vest.

The Cliff Conversation

The cliff is the minimum time before any equity vests.

Standard is 12 months. If someone leaves before the cliff, they get nothing.

Harsh? Maybe. But it filters out people who aren’t serious. And it protects from scenarios where someone contributes for 3 months then disappears with meaningful equity.

The cliff isn’t punishment. It’s alignment.

The Exit Conversation

What happens if a founder wants to leave?

Questions:

• Can they keep their vested equity?
• Can they sell their shares? To whom?
• Does the company have right of first refusal?
• What about unvested shares?

Put this in writing before it matters.

I’ve seen founders leave and then try to sell their shares to competitors. Or hold shares hostage during acquisition negotiations. Written agreements prevent this.

The Decision-Making Conversation

Equal equity doesn’t mean equal votes on everything.

Questions:

• Who has final say on product decisions?
• Who has final say on hiring?
• Who has final say on finances?
• What requires unanimous agreement?

Startups need fast decisions. “Everything requires consensus” is slow and political.

Assign domains. Trust each other. Override when necessary but rarely.

The Compensation Conversation

Early on, everyone sacrifices. But for how long?

Questions:

• When does market salary kick in?
• Who decides salary changes?
• What if one founder needs more cash than others?
• How do we handle inequality fairly?

I’ve seen founders burn out because they couldn’t pay rent while their co-founder with a working spouse lived comfortably.

Different situations require different solutions. Discuss them.

The Failure Conversation

Most startups fail. What happens then?

Questions:

• Who owns the IP if we shut down?
• Can founders start new companies in the same space?
• How do we wind down fairly?
• What debts are we willing to take on?

Morbid? Maybe. But clarity prevents lawsuits.

When To Have These Conversations

Before you write code. Before you spend money. Before you tell anyone you’re co-founders.

Put it in writing. Not because you don’t trust each other. Because memories differ. Because circumstances change. Because having it written removes ambiguity.

A $500 lawyer session now prevents $50,000 disputes later.

The Uncomfortable Truth

If these conversations are hard, that’s a red flag.

Founding a company is harder than talking about equity. If you can’t navigate these discussions, you can’t navigate market challenges or product pivots or cash crunches.

The conversations reveal alignment—or lack of it.

Better to find out now than after two years of work.