Fairness is crucial in dividing equity among cofounders from "summary" of The Founder's Dilemmas by Noam Wasserman
When dividing equity among cofounders, fairness is a fundamental consideration. The allocation of ownership stakes can have a significant impact on the dynamics of the founding team and the long-term success of the venture. Fairness in equity distribution is crucial because it sets the foundation for a harmonious and productive working relationship among cofounders. Unfair equity splits can lead to resentment, conflicts, and ultimately the downfall of the startup. Cofounders who feel they have been unfairly treated in the equity allocation process are less likely to be fully committed to the venture and may be more inclined to leave or sabotage the company. This can disrupt the operations of the startup and hinder its growth and success. Fairness in dividing e...
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