Dear SaaStr: How Much Equity Should a Late Cofounder Get?

Dear SaaStr: How Much Equity Should a Late Cofounder Get?

I’ve been through this both as a founder and a seed investor.

The answer? From 2:1 to 5:1, probably. Depending on when and how they join.  How “late” a cofounder they are.

Those are relative “fairness” ratios that everyone can get their arms around. 2:1 often feels fair if the co-founder joins very early, before there’s all that much there … but after things are established. 5:1 often feels fair if they join as things are just taking off.

All you can do is what’s fair.

You can see with co-founders overall, the average at IPO is 2:1 between the founder-CEO and the other founder.

That data here:

At the Top SaaS Companies, Founder-CEOs Own ~15% at IPO. And Most Co-Founders Are Not Equal (And That’s OK).

Published on March 11, 2022

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