Case study · Deals & structuring
A 90/10 founders' split that earns its way to fair
A global tech platform start-up with two very unequal founders. We structured an interim founders' agreement where equity is conditional, control is clear, and every pound of long-term value sits inside the company.
- 90/10
- Founding split at inception
- 10 → 33%
- If the second founder goes full-time early
- 50 / 4yr
- Half vested up front, half monthly
- 75/25
- Proceeds override on an exit inside 12 months
The risk
Unequal effort. Equal promises.
Handing a meaningful stake to a part-time contributor with no way to adjust it is a classic early-stage failure mode: one founder carries execution while the other retains disproportionate upside. It ends in resentment, stalled decisions and an unclean cap table that makes raising harder than it needs to be.
Add no vesting, no IP assignment and no leaver terms, and the company has no way to reclaim equity, no clean ownership of its own product, and no route out of deadlock.
Before
Where the business started
Equity
- Static 90:10 split with no adjustment mechanism
- Meaningful ownership held by an uncertain, part-time contributor
Commitment
- No link between ownership and contribution
- One founder carries execution while the other holds upside
Departure risk
- No vesting, so a founder could leave with full equity
- Dead equity on the cap table forever
IP
- Fragmented or personally owned
- Not fundraise- or acquisition-ready
Governance
- No control rights, casting vote or reserved matters
- Deadlock highly likely
Investment
- An unclean cap table deters investors
- No accountability or enforcement mechanism
After
Where the agreement took it
Equity
- Conditional, time-based and commitment-linked
- Uplift to ~33% at six months full-time, ~25% at twelve
Commitment
- Ownership scales only if contribution does
- A time-sensitive incentive to join early
Departure risk
- 50% immediate vest, 50% monthly over four years
- Unvested shares forfeited at nominal value on exit
IP
- All business IP assigned to the company
- Personal brand licensed back, revocable on ~180 days' notice
Governance
- Casting vote with the majority founder in the early phase
- ~75% approval for fundraising, structural change and £20k+ commitments
Investment
- Clean, defensible, investor-ready cap table
- Value consolidated at company level for future rounds or sale
The result
A probationary co-founder, not a passenger.
Ownership, contribution and control now move together. The second founder's upside is real but earned, and time-sensitive. The operating founder keeps control, downside protection and economic priority on an early exit. IP sits with the company, so the business is scalable, fundable and saleable.
What's inside the agreement
Equity, control, IP, enforcement, exit
Half of the founding equity vests immediately in recognition of work already done; the other half vests monthly across four years. On top of that sits the uplift: if the second founder commits full-time within roughly six months, their stake rises to around a third; within twelve, to a quarter. Equity is earned through commitment rather than handed over at inception, and the majority founder is protected from premature dilution.
If the company sells within roughly twelve months, proceeds are split ~75/25 in favour of the operating founder and all shares accelerate to full vesting. The override reflects true contribution during the most fragile phase and prevents a windfall from short-term passive involvement.
Founder A is Managing Director with full operational control; Founder B starts as a part-time advisor with a defined path to operator. Monthly reporting, bi-monthly strategy meetings and quarterly deep dives keep engagement contractual rather than optional. Accounting is outsourced early and compliance, insurance and legal handled proactively.
All business-related IP — pre-incorporation work and ongoing development — is assigned to the company. Personal brand IP stays with the founder but is licensed to the company, revocable on around 180 days' notice. That makes the company, not an individual, the owner of everything scalable: product, systems and platform.
Only vested shares carry voting rights. Voting otherwise follows shareholding, with a casting vote for the majority founder during the early phase. Both founders can be directors; Founder A chairs. Reserved matters require ~75% approval — major transactions (~£20k+), fundraising and dilution, and structural change.
Three tiers: a good leaver takes fair value, a bad leaver a discount of roughly 10–20%, and a horrible leaver nominal value only. Unvested shares are always forfeited and transferred at nominal value. IP assignment warranties, confidentiality obligations and misconduct and reputation clauses sit alongside.
Around six months' non-solicitation of clients and twelve months' non-poaching of team and suppliers after exit. Founders can pursue other ventures, provided there is no conflict with the company — protecting the early customer base, team stability and operational continuity.
Exit triggers cover voluntary departure, breach or misconduct, incapacity and mutual agreement. Shares are first offered to the remaining founder, then the company, with payment stageable over ~180 days. Disputes escalate through internal discussion, an independent third party, CEDR mediation and finally the UK courts.
What this actually costs
Three levels, priced up front
Light
£990 ex VAT
A light founders'/shareholders' agreement with a basic vesting clause, simple IP assignment and light leaver provisions. Dynamic equity and exit economics kept simple.
Pre-revenue or testing phase — protection without over-investing yet.
Mid
£1,237 – £1,980 ex VAT
A proper vesting schedule, conditional equity mechanics, defined operator/advisor roles, a structured leaver framework and IP assignment plus licensing.
Serious builders with some complexity who don't want to redo it in six months.
Complete
£2,475 – £4,970+ ex VAT
Dynamic equity adjustment, advanced vesting and acceleration, a custom early exit waterfall, a multi-tier leaver framework, detailed governance and transfer and buyback mechanics.
The tier this case study sits in — asymmetric founders and layered protections.
Indicative pricing only, not legal advice. Final scope depends on how detailed the equity mechanics are and how much negotiation is involved.
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