Why My Co-Founder And I Decided To Split Equity 50/50

When I first took the leap from my 9–5, long before I started building Digital Press with Drew Reggie, I did my homework.

After working for (and mentored by) an entrepreneur for 4 years, I had come to learn the value of “knowing what you don’t know.” As eager as I was to build something of my own, I was still painfully aware that I didn’t have all the answers. I had taken the leap, I was a glorified freelancer, and in order for me to become a successful entrepreneur, I still had many hard lessons to learn.

So, I made an extreme effort to talk to as many successful individuals and business leaders as I could find: family friends, friends of friends, even clients I was ghostwriting for. We’d wrap up a call, and then before hanging up, I’d say, “Hey, do you mind if I pick your brain on something real quick?”

One of the biggest questions I had was how to effectively start a business.

I’d heard horror stories about people who had started companies with their best friends. My mentor of four years told me how, in his late twenties, him and one of his closest friends had built an incredible profitable lead gen company — only for his friend to steal money behind his back. Another family friend told me how him and his closest childhood friend had started a trading firm together, only to end up in court against one another five years later.

“Who is going to be the majority owner?” he asked me, inquiring about my business idea.

“I was thinking Drew and I would split it, 50/50,” I said.

The man shook his head and said, “50/50 splits are dangerous.” He then proceeded to ask me whether I felt I was bringing more to the table — whether I deserved more than 50%.

And honestly, I probably could have made a case for how I deserved more of the company. I was the one who had taken the leap first. I was the one who had spent 4 years building an influential personal brand in this space. I, I, I.

“I don’t want more than 50%,” I told him — and that was the truth.

In my mind, a decade of memories played over and over again: Drew driving 7 hours from Missouri, through the middle of the night, to pick me up at my parents’ house when I was 19 years old; Drew and I living in a run-down fraternity house together for that entire summer, making music; Drew and I getting locked in the University of Missouri library because we hadn’t heard them closing for the night and we were in the middle of brainstorming the name of our first company, homeGrown Instrumentals; Drew and I sitting on the porch of that rundown fraternity house every night for 3 months, talking about the strained relationships we had with our families; Drew and I doing trips back and forth from Atlanta to Chicago just to hang out, make music, and maintain our friendship.

All relationships in life worth keeping are 50/50. And I knew if I had asked for more than my fair share, we would stop treating each other equally — which wouldn’t lead to the best possible product, service, and company.

Just because I come up with the melody of the song, doesn’t mean I “own” more of it. We’re collaborating. We’re in the room, together. We’re shaping the idea, together. Some songs, I add more layers. Other songs, he builds practically the entire thing and all I do is add two piano note accents — but those accents end up tying the whole thing together. But we learned, as 19-year-old kids who wanted to become a “production duo,” that if we nickel-and-dimed each other, we would only distract ourselves from what truly mattered: the music.

I wanted that exact same dynamic to carry over into our business endeavors.

So, we split everything 50/50. And it worked.

As a founder, I will be the first to admit that everything we’ve built, we built together.

I might have taken the leap first, but Drew followed — and then ended up pushing me during times I started to doubt myself.

I might have built the personal brand, but Drew was the one who came up with our entire outreach and sales strategy.

I might have been “the words guy,” and come up with the core of our message, but Drew challenged it, and edited it, and helped refine it. And then he built a website for it to stand on. And then he designed us a logo, and business cards, and a million other things I wouldn’t have known how to do.

When we weren’t sure who our second hire should be, and I hesitated hiring anyone at all, Drew was the one saying, “We’ve already taken one leap — let’s leap again!”

I realize there are circumstances when founders seek co-founders and there is an equity difference, but I’m not one of those founders. I believe founders are a 2v2 team. I believe they have different responsibilities, and should have different skill sets, but that relationship cannot and should not be quantifiably different. And if the dynamic is quantifiably different, you’re not founder & co-founder.

You’re founder & expert level employee who has equity in the company.

Those two dynamics are not the same.

So, if you want to build the best possible product, and more importantly, you want to build the best possible and longest-lasting working relationship, split ownership 50/50.

After all, you’re building it together.

100M+ Views | 5x Author | Founder of Digital Press | Want to build a Daily Writing Habit? Join me in Ship 30 for 30 all of 2021: https://ship30for30.com/

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