How should we found our startup and allocate equity?

Dividing equity pro rata among founders may seem like a default option, but often it can lead to tension where the founders' individual responsibilities, based on the skill sets each brings to the table, results in disproportionate responsibility and output. It may be a difficult conversation to have, but your group may benefit from an honest conversation about for what each member will be responsible in the early stages of the enterprise.

Vesting equity often applies when a member is providing services or "sweat" in lieu of a cash capital contribution. For those members who are providing cash up front, the delayed conversion of their cash contribution into equity may be a non-starter.

What is appropriate for your enterprise will depend on very specific facts; to obtain actionable advice, you should consult a local business attorney in private.