Can there be 3 founders of a company?

Can there be 3 founders of a company?

Startups in India usually have a co-founder composition of either one, two, three or a maximum of four. Having a pool of co-founders beyond that is a rarity in the country’s startup ecosystem.

How do you split equity among three co-founders?

Summary

1. Rule 1) Try to split as equaly and fairly as possible.
2. Rule 2) Don’t take on more than 2 co-founders.
3. Rule 3) Your co-founders should complement your competencies, not copy them.
4. Rule 4) Use vesting.
5. Rule 5) Keep 10\% of the company for the most important employees.

How much equity should a cofounder have?

As a rule, independent startup advisors get up to 5\% of shares (or no equity at all). Investors claim 20-30\% of startup shares, while founders should have over 60\% in total.

Should equity in a startup be split equally?

If it was a joint effort, then there is no doubt that equity should be split equally. At the other extreme, say the idea is the result of a 4 year PhD by one of the founders, this may be worth a fair amount, especially as it is likely to have formal intellectual property to it.

What should you consider when dividing equity between founders?

Any previous business experience a founder has in building a company should be given more weight when dividing equity. Building a startup is difficult work, and any prior experience fundraising, connections to investors, creating an MVP, or scaling a product are invaluable assets that increase the startup’s chances of success.

Why do founder teams split their equity by default?

Whether because of avoidance, too much optimism, or lack of knowledge, founder teams that split their equity by default were also found, per Wasserman’s research, to have triple levels of unhappiness within their teams. Which begs the question why? It all comes down to fairness.

Why should the startup founder be allocated more equity?

For that reason making sure the startup has the resources and capital to grow, and execute on the idea, is ultimately why the business founder should be allocated more equity. Remember, if a startup fails because the business didn’t grow and execute, 50\% of nothing is zero.