Equity splits should maximize the motivation of your co-founders to stay committed to the company over the long term.

As a CEO, your focus should be on creating an equity split that motivates your teammates rather than just negotiating a deal.

The primary safety mechanism for giving equity is implementing vesting and a cliff, which ensures that co-founders earn their equity over time.

Typically, equity is subject to four-year vesting, meaning co-founders must work for four years to fully earn their equity stake, along with a one-year cliff where no equity is earned if they leave or are fired within the first year. Vesting with a one-year cliff acts as a safety mechanism, allowing you to correct any poor decisions about co-founders without long-term harm to the company.

Being more generous with equity for co-founders is beneficial, as it fosters long-term motivation to stay committed to the startup, especially during challenging times.

As a CEO, you should aim for your co-founders' equity stakes to inspire them to work passionately, rather than having to motivate them daily.

While equal equity splits are a common guideline, they may not always be applicable; consider the future motivation of your co-founders when deciding on equity distribution.

If you don't see the long-term value in your co-founders, you should reconsider their roles on your team and whether they deserve a generous equity grant.