How should start-ups allocate equity?

Legal analysis: First, according to the proportion of capital contribution, capital contribution is the basis of equity distribution, and equity distribution according to the proportion and total capital contribution may make each investor get more or less equity. Second, the way of equity distribution, average distribution. Two shareholders, one contributing 60% and the other 40%, share the equity equally. The average distribution method may weaken the control of the founder of the company and affect the decision-making of the company.

Legal basis: Article 26 of People's Republic of China (PRC) Company Law states that the registered capital of a limited liability company is the capital contribution subscribed by all shareholders registered in the company registration authority. Where laws, administrative regulations and decisions of the State Council have other provisions on the paid-in registered capital and the minimum registered capital of a limited liability company, those provisions shall prevail.