Abstract
Michael Reich is having severe doubts about how he split the equity with his co-founders two months ago, when they completed a one-page "November Agreement." Since then, Michael has found an angel investor and has worked non-stop on the business, while one co-founder was off enjoying the winter break with his family and the other worked on lucrative consulting contracts for other companies. Michael has just sent his co-founders a proposal that would re-allocate the equity within their founding team, and all three founders are getting ready to reopen a negotiation they thought had been finalized.
Keywords: Business Startups;
Entrepreneurship;
Capital;
Venture Capital;
Equity;
Compensation and Benefits;
Negotiation;
Partners and Partnerships;
Citation:
Wasserman, Noam, and Deepak Malhotra. "Negotiating Equity Splits at UpDown." Harvard Business School Case 809-020, November 2012. (Revised from original July 2008 version.)