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Separate equation contract

every startup tries to be different or unique but there are some topics that every company has to approach one way or another and one of those is how to split the equity whether it's an energy company or a wearable device there's equity to be split so today I'm gonna look at the process of splitting equity and take a closer look at some of the good practices as well as the common mistakes when it comes to how to split the equity before I get into the methodology and the ins and outs of the actual process of splitting equity keep this in mind it takes five to ten years to build a really valuable company and over that long time frame there are tons of changes in equity and investors and role changes that that initial split in equity no longer really matters with that said it's still something that every company has to do so it's worth being informed about the easiest way to go about this and probably the best place to start is an equal split among co-founders so every co-founder gets an equal percentage of the hundred percent of the company and this is a very good method at avoiding any problems and keeping everyone on the same page because it's not saying that anyone co-founder is more important than another Y Combinator is the biggest startup accelerator they recommend this themselves but in reality it doesn't always work out that way and for one reason or another co-founders will skew equity to one or another so I'm gonna look at those reasons that equity is skew both good and bad and talk a little bit more about them the first is the idea and this is by far the most common one the person that actually came up with the idea that started the company often has a very personal relationship to that idea you know it's their baby they want to grow it it's their thing they created it but it really shouldn't have any correlation to equity and that's because nine times out of ten in a five or ten year period they'll stray far away from that original idea making adaptations and responding to the market and even if that idea is absolutely perfect from the start it's not the idea that makes it succeed it's the thousands and thousands of hours of work that follow it over those years that execution that determines whether it's successful or not the next common reason for skewing and equity split is time commitment and there are kind of two parts to this there are two ways of interpreting it the first is when I found our joint and that really shouldn't correlate to equity so if we're in a six-month time frame the first six month of a startup if somebody joined two months in rest of them were just right from the start that doesn't really matter consider a 10-year...