Instead of hiring external CEOs, Gary launches new businesses with trusted employees who've worked with him for a decade. This "family business" model ensures deep alignment, institutional knowledge, and trust from day one, which was key to the successful exits of his companies Resi and Empathy Wines.

A founder's refusal to grant equity is the primary reason service firms fail to scale and mitigate "key person risk." To attract top talent that can grow the business independently, founders must make employees actual owners. People will only act like owners if they are owners, and equity is the only way to achieve that alignment.

Don't default to a 50/50 split on day one. Instead, agree to formally discuss equity only after reaching a predefined milestone, like $10,000 in revenue. This allows you to base the split on demonstrated contribution and commitment, avoiding the resentment from premature, misaligned agreements.

A co-founder's deep equity stake and personal identity being tied to the company creates unparalleled ownership. This incentive alignment makes them default-to-fix problem solvers, whereas an employee's default response to extreme difficulty might be to leave.

Don't call someone joining your two-year-old, revenue-generating startup a "co-founder." They are a business partner joining a de-risked asset. Their equity stake should be far from 50/50, reflecting the significant value and progress you've already built, such as achieving initial product-market fit and revenue.

For a high-skill service business, the biggest barrier to scaling is finding autonomous, high-quality employees. To retain this crucial talent and prevent them from leaving to start a competing business, founders should offer an equity stake that vests over a long period (e.g., 5-6 years), aligning their incentives with the company's long-term growth.

When you need to fill a major operational gap, hire for the role (e.g., a COO) before immediately seeking a co-founder and splitting equity. This allows you to "date before you marry"—assessing a candidate's impact and fit as an employee before committing to them as a long-term partner.

Granting a full co-founder 50% equity is a massive, often regrettable, early decision. A better model is to bring on a 'partner' with a smaller, vested equity stake (e.g., 10%). This provides accountability and complementary skills without sacrificing majority ownership and control.

Instead of all founders jumping into the venture simultaneously, one can go full-time while others maintain their jobs and provide support. This staggered approach mitigates personal financial risk for the team as the business scales to support more salaries.