How should co-founders divide equity - and what happens to those shares if one person leaves?
In Part 1 of my conversation with Phil Hails-Smith, Managing Partner at
Joelson, we unpack the ownership decisions that founders building consumer and CPG brands need to make long before an investment round or exit. (This conversation was soo jam-packed with value that we had to split it in to two!)
Joelson B Corp is the leading commercial law firm specialising in helping founders of scaling consumer brands. The're the law firm that advised the innocent founders on their landmark sale to Coca-Cola (and still work with them at JamJar Investments today, which tells you something...). They also work with brands like Little Moons, Trip, Eat Natural, Bear Graze and Pulsin, and are always present at every industry event, chatting to everyone, with smiling faces and ready to help.
In this episode, Phil shares
practical benchmarks rather than vague principles: why a
50:50 co-founder split is relatively unusual, when
60:40 or
70:30 may be more appropriate, how vesting can prevent dead equity, and why both founders may need to be subject to the same provisions.
We also explore all the questions you might have around
advisor equity, employee option pools, EMI options and the hidden dilution founders can absorb when investors negotiate on a fully diluted basis.What You’ll Learn