cofounder equity
Cofounder equity is the slice of a company that each person who builds it from the start owns, usually shared out before the business is worth much at all.
In plain English
Three friends in Yaba used to gather at a small buka on Herbert Macaulay after work, drawing app screens on a serviette because none of them could afford a designer yet.
One friend wrote the code at night, another quit her bank job to hunt for customers, and the third put in his savings to pay for a server and a lawyer's letter. When the app finally worked, they had to decide who owned how much of the thing they had built. That decision, made over cold amala and warm arguments, is cofounder equity.
It is not a salary and it is not a gift. It is a claim on the value of a company that does not exist yet in any real, spendable sense. The coder who wrote through many nights might get 40 percent, the one who found the first hundred users might get 35 percent, and the one who funded the server and the lawyer might get 25 percent. Nobody can eat those percentages today. They only mean something later, if the company grows and someone wants to buy shares, buy the whole business, or list it.
A founder in London building a fintech with a university friend might split ownership 60 and 40 because one person left a comfortable job first and carried more risk for longer. There is no fixed formula, only fairness that the people involved can live with for years, because resentment over an unfair split can calmly wreck a company faster than any competitor.
Diaspora founders often add a twist. Someone in Toronto might fund the idea while a cofounder in Lagos runs it day to day, and they still have to agree on equity even though one person is far from the daily grind and the other is far from the money.
The wise ones write it all down early, with vesting schedules that release the equity slowly over years, so nobody walks away six months in holding a fat slice of a company they stopped building for.
Four cofounders start a Lagos logistics startup. They agree to split ownership 30, 30, 25 and 15 percent based on time, money and idea contributed. Two years later, an investor values the company at ₦500,000,000. The 30 percent holders are now sitting on paper value of ₦150,000,000 each, on paper only, until shares are actually sold.
Questions people ask
How should cofounders decide who gets what percentage?
Most advisers say look honestly at four things: who had the idea, who is taking the biggest financial risk, who works full time on it, and who brings skills or networks that are hard to replace. Write the reasoning down, more than the numbers, so it makes sense later when memories get fuzzy.
What happens if a cofounder leaves early?
This is exactly why vesting matters. If equity is set to release over four years rather than handed out fully on day one, a cofounder who leaves after eight months only keeps the small portion earned so far, and the company is not stuck carrying a large owner who no longer does any work.
Can cofounder equity be changed later?
Yes, with everyone's agreement, especially as the company grows and new investors, employees or advisers need their own slices. Most cofounders revisit the split when a new funding round happens, since fresh money usually means everyone's percentage gets diluted a little to make room.
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