Negotiating Equity Splits at UpDown
University of Southern California - Lloyd Greif Center for Entrepreneurial Studies
Deepak K. Malhotra
Harvard Business School - Negotiation, Organizations & Markets Unit
April 20, 2012
Harvard Business School Entrepreneurial Management Case No. 812-701
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.
Date posted: May 8, 2012