Starting a venture with a co-founder is like a corporate marriage. In the early euphoria of brainstorming, few founders like to talk about what happens if someone stops performing or wants to exit after six months.
1. Reverse Vesting (The 4-Year Standard)
Never grant 100% equity on Day 1 without vesting. A standard 4-year vesting schedule with a 1-year cliff ensures that each founder earns their equity as they contribute time and results.
2. Intellectual Property (IP) Assignment
All code, trade secrets, trademarks, and design assets developed by any founder must legally belong to the company, not to the individual.
3. Deadlock Resolution Mechanism
When there is a 50-50 equity split, what happens when you disagree on a critical business hire or funding term? Establish an advisory board casting vote or mediation mechanism beforehand.