How to Best Prepare for Fair Equity Splits

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By Lisette Smith

For new partners, either starting a new venture or merging their businesses, few conversations are as difficult as discussing what the equity split will be. So, like any potentially messy conversation, it is often avoided. The default is to go with an even split or a split that ensures control to a specific founder.

When we see partners in serious trouble, with businesses that are in jeopardy because they can no longer work together, it is often because there is a sense of unfairness about contribution, compensation or control.

Often this can be traced to decisions made about how ownership will be split, almost always a time of great uncertainty about how the business will develop and without full discussion of the implications of the decisions.

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