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Who gets the title founder in your healthcare startup

on April 12, 2012

What’s in a name? When it comes to the name of “founder,” the answer is, a lot.

Serial tech entrepreneur Jay Adelson recommends that only the people who actually come up with the idea for a company, take the risk and initiate the process of building the company take on the title of founder. Ideally, this would be one person.

But when there’s collaboration in starting a company, as there often is with new medical devices, pharmaceuticals and digital health products, the “co-founder” title is unavoidable. Adelson recommends arranging an even split in equity, regardless of what each person’s functional position within the company will be. Trying to split it otherwise could result in baggage that’s carried out throughout the entire operation.

In every case, Adelson cautions, founders should avoid bringing in someone as a co-founder later on in the process for a smaller share of equity, which can cause complications. Only give the co-founder title if expectations are very clear up front, and get each person’s equity stake and role in the company in writing.

“Don’t be such a nice guy here,” Adelson says. “This is an important thing to get clear up front because, believe me, the guilt you’ll feel and the tremendous pain later of calling someone a co-founder when they’re not is much worse than getting this totally done right up front.”

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