As you say, the simple (and common) case is that everyone starts working in earnest on the company at roughly the same time, and equity split is a no-brainer.<p>A very common set of cases that is only slightly more complicated than this is the one where everyone in reality has started working in earnest on the company at approximately the same time, but for whatever reason, one of the team members feels that some work they did prior to starting the company with their partners also counts as &quot;earnest work&quot;. Most of the point of this article is that you shouldn&#x27;t complicate your company by accepting that argument; you will regret it down the road.<p>The next most common set of cases is that &quot;cofounder&quot; status is used as a recruiting tool. The company really wants to work with a particular person, but that person doesn&#x27;t want an employee role. This can happen months or even years after the company has been founded. The simple answer here is that a cofounder is whoever the existing cofounders say is one. I personally think you&#x27;re better off keeping things simple: if you call someone a cofounder, give them an equal share of the equity. If the road ahead doesn&#x27;t have enough opportunity for a new cofounder to contribute so much that they&#x27;ll earn the share, don&#x27;t call them a cofounder.<p>After that, you&#x27;re on your own.