Do Venture Capitalists care how the equity is split among the founders?

David S. Rose
David S. Rose , Founder and CEO , GUST INC.
4 Oct 2012

People who tell you that VCs won’t look at a company with an even equity split are being silly. That has never once, in my experience, been even a slight hiccup, let alone a dispositive factor in a seed investment.

That said, there is a core of truth in the concept that there always needs to be *some* way to make a decision. That’s why the Senate has the Vice President as the tie breaker, and why boards of directors are almost universally an odd number. Realistically, if a company is jointly governed by two people who have exactly equal say, it is quite possible that if there is a major disagreement the company will implode because it will not be able to take action.

The usual ways around this are to have one person be the CEO with decision-making ability regardless of equity interest, or have an equity split that can’t come out 50/50, or have a board with an outside director (or investor) making an odd number.

Gust Launch can set your startup right so its investment ready.


This article is intended for informational purposes only, and doesn't constitute tax, accounting, or legal advice. Everyone's situation is different! For advice in light of your unique circumstances, consult a tax advisor, accountant, or lawyer.