2 minute watch | April.06.2026
Nick Feldman and Cody Peterson, partners in Orrick's Technology Companies Group, discuss how to approach founder equity splits thoughtfully. Learn:
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Nick: Cody, let's talk about founder equity splits. What's the right answer?
Cody: Shockingly, the answer is: it depends. Depending on how many founders you have, the role, the responsibility, the expected contributions going forward -- there's really not a one size fits all approach. Particularly in scenarios where there's two co-founders coming to me, they come with a default of 50-50 and I often tell them that might not always be the right approach. Do you agree with that?
Nick: Yeah, I completely agree. Like you said, I think there’s no right answer, but 50-50 is usually not, in my opinion, the right answer. One, because in a two-person team, the split is just never 50- 50 exactly. Two, it also sets up the company down the road for potential deadlock. And there are other components of what the split looks like in terms of vesting. Do you think that there's a kind of standard founder vesting formula?
Cody: Yeah. Anytime there's more than one founder, it's really important that founders are subject to vesting. And generally, the standard employee vesting is a four-year vesting schedule with a one-year cliff. We often see founders take the same approach. There might also be double trigger acceleration there, but it's a really, really important more than anything else that you're alluding to. You just don't want to get in a scenario where the company is kind of stuck. Making sure that you are both subject to -- or whoever, however many the founders are -- subject to vests from the beginning is the most important thing.
Nick: And I think getting off on the right foot. To the point you made earlier, this is the time to have really clear open communication. Everybody is on good footing, in a good relationship now -- and hopefully it stays that way, but it may not always. Coming up with clear expectations of what is going to happen: if a member of the founding team leaves before a year, should they leave with some equity for that early contribution or should they not?