the startups.com platform about startups.comCheck out the new Startups.com - A Comprehensive Startup University
Education
Planning
Mentors
Funding
Customers
Assistants
Clarity
Categories
Business
Sales & Marketing
Funding
Product & Design
Technology
Skills & Management
Industries
Other
Business
Career Advice
Branding
Financial Consulting
Customer Engagement
Strategy
Sectors
Getting Started
Human Resources
Business Development
Legal
Other
Sales & Marketing
Social Media Marketing
Search Engine Optimization
Public Relations
Branding
Publishing
Inbound Marketing
Email Marketing
Copywriting
Growth Strategy
Search Engine Marketing
Sales & Lead Generation
Advertising
Other
Funding
Crowdfunding
Kickstarter
Venture Capital
Finance
Bootstrapping
Nonprofit
Other
Product & Design
Identity
User Experience
Lean Startup
Product Management
Metrics & Analytics
Other
Technology
WordPress
Software Development
Mobile
Ruby
CRM
Innovation
Cloud
Other
Skills & Management
Productivity
Entrepreneurship
Public Speaking
Leadership
Coaching
Other
Industries
SaaS
E-commerce
Education
Real Estate
Restaurant & Retail
Marketplaces
Nonprofit
Other
Dashboard
Browse Search
Answers
Calls
Inbox
Sign Up Log In

Loading...

Share Answer

Menu
Legal Advice: What problems can arise if two Founders of an early stage startup share the same equity, but one of them is appointed as the CEO?
Assaf Ben-David, Mentor, Entrepreneur, Lawyer, Public Speaker answered:

In order to avoid a deadlock (tie) situation, it is preferred that there not be an equal allocation of shares. In this case, it isn't exactly equal seeing how the only situation of a deadlock would be if 1 'tech guy' and 1 'business guy' vote against the other two.
You can solve this by deciding, in the founders agreement, that the chairman of the board of directors (in the company or in the venture), or the CEO, has an extra vote in the event of a deadlock situation. Another option is to appoint an external professional (lawyer/businessman who is familiar with your startups field/market), and he decides if a deadlock arises (for this option you need someone neutral who you can all agree on).
I've successfully helped over 300 entrepreneurs and I'd be happy to help you. Good luck

Talk to Assaf Upvote • Share
•••
Share Report

Answer URL

Share Question

  • Share on Twitter
  • Share on LinkedIn
  • Share on Facebook
  • Share on Google+
  • Share by email