Do Venture Capitalists care how the equity is split among the founders?
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.
*original post can be found on Quora @ : http://www.quora.com/David-S-Rose/answers *
Written by David S. Rose
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