Shareholder
Equity Split Tool

There is no universal answer, but research and experience suggest that roughly equal splits between co-founders tend to produce better outcomes than highly unequal ones. Equal splits signal mutual commitment and avoid resentment. The most important factors to weigh are: who is going full-time vs part-time, who had the original idea and has been working on it longer, the relative skills each founder brings, and whether one founder is contributing capital. Advisors typically receive 0.25–1%, early employees 0.1–0.5%, and option pools 10–15% pre-Series A.

A vesting schedule is a timeline over which founders and employees earn their equity, rather than receiving it all upfront. The standard is a 4-year vest with a 1-year cliff: nothing vests in the first 12 months, then 25% vests at the 1-year mark, and the remaining 75% vests monthly over the next 3 years. Vesting protects the company if a co-founder leaves early — they can only take the equity they've earned. Investors require vesting schedules before most funding rounds.

An Employee Stock Option Pool (ESOP) is a reserved portion of equity set aside to incentivize future employees, advisors, and contractors. Most investors expect a 10–15% option pool to be established before a Series A round (called the "pre-money option pool"). If you don't create one before a funding round, investors will typically require it — which dilutes founders, not investors. Creating it early gives you more flexibility in hiring.

When you raise funding, new shares are issued to investors. This increases the total share count, which reduces everyone's percentage — this is dilution. If you raise at a 20% post-money stake for your investor, every existing shareholder's percentage drops by 20% proportionally. For example, if Founder 1 held 60%, they'll hold 48% post-round (60% × 0.80). The key insight: dilution is unavoidable, but if the round increases the value of the company sufficiently, your smaller % stake is worth more in absolute terms.

Pre-money valuation is what your company is worth before new investment. Post-money is the pre-money valuation plus the new investment amount. If your pre-money valuation is $4M and you raise $1M, your post-money valuation is $5M and the investor owns 20% ($1M ÷ $5M). The dilution simulator in this tool uses the post-money investor percentage — the % they own after the round closes.

You should have a shareholders' agreement (SHA) in place as early as possible — ideally before incorporating or at the same time. The SHA formalises equity split, vesting schedules, IP assignment, decision-making rights, drag-along and tag-along clauses, and what happens when a founder leaves. Nexub Leap includes a lawyer-drafted SHA template as part of the incorporation package in Singapore, India, Malaysia, Indonesia, and Vietnam.