Every failed startup has a silent crime scene.
It isn’t the product.
It isn’t the market.
It’s the cap table.
Equity is not a number.
It is a psychological contract between people who are about to suffer together.
Most founders don’t break up because of business.
They break up because of unspoken expectations.
One founder codes till 3 AM.
Another networks on LinkedIn.
A third is “thinking strategically.”
All three believe they deserve the same share.
That’s not partnership.
That’s future litigation.
What founders usually do is this:
2 founders: 50% / 50%
3 founders: 33% each
4 founders: 25% each
5 founders: 20% each
It feels clean.
It feels fair.
It avoids conflict.
It is also the most common way to manufacture future conflict.
Because equality at Day Zero assumes equality forever –
of effort, sacrifice, risk, skill and stress.
Reality never cooperates.
The first crack appears when leadership is unclear.
If everyone is equal, no one is in charge.
And when no one is in charge, investors are confused.
Decisions slow.
Accountability dissolves.
Board meetings start feeling like group therapy.
A startup must have a clear leader from Day One – not a committee of best friends.
Then come the deeper fractures.
One founder becomes full-time.
Another stays “in transition.”
One carries the emotional weight of survival.
Another still believes in “optional effort.”
This is where equal splits begin to rot.
So how should equity really be designed?
Start with the forces that actually matter:
a) Role clarity:
Who owns product, sales, GTM, hiring, fundraising?
If nobody owns something, everyone will fight over it later.
b) Time commitment:
A full-time founder is not the same as a weekend founder.
Treating them equally is how resentment is manufactured.
c) Skill advantage: Certain skills at Day Zero are oxygen.
Tech, domain, GTM – scarcity deserves weight.
d) Risk exposure:
Who quit their job?
Who put personal savings?
Who jumped while EMIs were still running?
e) Capital input:
Track real money.
Even small amounts matter when memories fade.
Once this reality is accepted, a far healthier structure emerges:
2 founders: 60% – 40%
3 founders: 50% – 30% – 20%
4 founders: 45% – 25% – 15% – 15%
5 founders: 36% – 24% – 18% – 12% – 10%
Not because a spreadsheet says so,
but because leadership, accountability and risk must be visible in the cap table.
Add vesting.
Add a cliff.
Write it down.
Founders don’t quit companies.
They quit unfairness.
A handshake is good.
A written agreement is better.
Skipping formality today is quietly scheduling a courtroom for later.
And finally,
Startups don’t fail because ideas are weak.
They fail because their founding structure can’t handle growth.
Design your equity the way you would design a building:
for load, pressure, expansion, and storms.
If the structure is wrong,
no amount of scale will save the story.