STRIVE LEXClarity. Precision. Resolution.\n \n \n Getting the equity split right on day one matters less than most founders think. Getting the vesting terms right matters much more.
Founders spend a disproportionate amount of time debating the initial equity split — 50/50, 60/40, or something else — and comparatively little time on vesting, the mechanism that actually determines what happens to that equity if a co-founder leaves early. In our experience advising early-stage companies, vesting gaps cause far more damage than an imperfect initial split ever does.
The most common gap is simply not having a vesting schedule at all — founders receive their full equity stake immediately upon incorporation. If a co-founder leaves six months in, having contributed relatively little, they retain their full stake permanently, while the remaining founders continue building the company around them. This is the single most preventable founder dispute we see, and it is entirely avoidable with a standard vesting schedule from the outset.
A vesting schedule without a "cliff" — typically a one-year minimum period before any equity vests at all — means a founder who leaves after a month or two still walks away with a proportionate stake. A standard structure of a one-year cliff followed by monthly or quarterly vesting over a total of four years is common precisely because it protects against very early departures while still rewarding genuine long-term contribution.
A proper founders' agreement should distinguish between a "good leaver" — someone who departs for legitimate reasons, such as health or a mutual decision — and a "bad leaver," someone who is terminated for cause or leaves to compete directly with the business. Without this distinction, the company has limited recourse to reclaim unvested or even vested equity from a founder who leaves under circumstances that genuinely warrant a different outcome.
A founders' agreement signed at incorporation and never revisited can become stale as the company evolves — particularly around decision-making authority, IP assignment, and what happens on a fundraise. Investors will scrutinise this document during due diligence, and gaps discovered at that stage are far more expensive to fix under time pressure than they would have been to address proactively.
None of this requires an unusually complex agreement — it requires a standard, properly drafted one, put in place before it feels urgent. If you are not sure whether your current founders' agreement covers these points, we built a short assessment tool that checks for exactly these gaps.