1.5 years into our startup, my partner now feels more valuable and wants me to dilute my equity. Is this fair?

Q: I’m a 1.5 years into our startup. We have a good operating agreement but didn’t require any vestment period for the founders. My partner now feels more valuable and wants me to dilute my equity from 40% to 20% and only 25% of the 20 is vested. Is this fair?

It might be fair.

Sometimes, 1.5 years down the road, the relative fairness of Day 1 equity is still … fair.

But, often it isn’t. Often, 1 of the founders ends up shouldering far more of the load than planned, and another … doesn’t.

The fairest thing is to reallocate equity.

And no vesting schedule? That’s a shame. No vesting favors the least-committed founder. More on why here: A Simple Commitment Test For You And Your Co-Founders | SaaStr

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Published on March 16, 2020

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