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We have a very complex team and our actual roles and skills are known to each other only after we started working and deciding the equities which would be vested in few years. We started working from few months ago. We are developing the product for enterprise customers so sales and contacts going to be important. Below is our composition. Current agreement is that we are going to get the equities vested in few years time. We are looking at founders share here

1) A had idea and a sales executive, brought the team together left the existing company 1 month ago. has near 50%.

2) sales executive. will be leaving his existing company in few days.

3) Was an executive in a product development company, now in a startup. Supposed to be good at product development and management but failed so far so we assigned him to take care of legal work. Not a technical person and can't understand any product development. Cannot leave his current job not till few months more due to visa problems. Currently living on a job visa provided by his existing company in silicon valley.

4)Developer working alone for 4 months. Also started building the technical team. Only technical person in the founding team. Stopped working for his previous company 3 months ago.

Equity distribution is done few months ago keeping in mind that the developer would just do the work of software development. And least amount of share is given to developer and is asking for increase in equity for doing product development also. Should the equity be distributed again? What would be the consequences if the equity of 3) is decreased now?

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Please read this post How to allocate ownership fairly – th3an0maly Sep 28 '12 at 4:13

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Based on the question I take it you are the developer, right?

The bottom line is that this looks like a very fragile team and very risky. From what little you say it looks like the chances for success are pretty low.

If the one technical person is not happy then the odds get even worse.

From what I see there are too many chiefs. Only one person doing any work right now. Not sure why there are 3 people for sales, executive, other positions.

If you are unhappy (or the developer is unhappy) then leave and find another startup or job.

0 to 3 months of work is nothing. I'd definitely start from scratch. And giving someone 50% just because they had an idea is nonsense. That won't fly. They need to be doing work and getting results for that 50%.

I'd walk away from this regardless of which person I was in the organization. I see no problem with dropping the equity of anyone as it seems no one has done any work at all.

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Is the business making money?? You have only been together a few months, three people have already left, etc. It sounds to me like equity distribution is non-point. Why do people who have left the company have any equity position at all?

Maybe I am just missing the point here? If people leave before there is profit, in my opinion they are only entitled to the money they invested, plus a little interest perhaps. Is the business profitable?

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My question must not have been composed properly that you got a sense of founders leaving the startup when it is leaving their previous company. – user1699696 Sep 28 '12 at 6:29

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