Stock Splits for founders

First, the founder vesting is very important and I agree with your firm stance on this. Although, in particular given the part time nature of your co-founders, you have to define in the agreements exactly what actually constitutes participation in the company so that the vesting (or lack thereof) actually has teeth.

Beyond that, I assume your question pertains to exactly how to decide what the equity splits should be. The best way to do this is to analyze things like rounds of funding. In effect, bringing the new "founder B" into the company as a new "investor".

The first step is determine what you think your company is currently worth today and look backward to when the venture first started. (You can think of this company value now as what VC's would call the "pre-money" valuation). For people already participating in the venture in terms of cash or unpaid efforts you can assign a value to those contributions and divide up the current ownership accordingly. From the information you have provided it sounds like you should have a majority of the stock and your cousin founder A should have a minority interest. (Founder B has none at this step). Based on the numbers you provided in cash alone, you should have 75% or more of the stock (minimum) at this point of the analysis process.

Now, is also helpful to the analysis to calculate a share price. For example, if you assume the company is currently worth $500K and you are going to issue 1M shares to just you two, the share price is $0.50. You would have 750,000 shares and "founder A" has 250,000....or whatever percentage you determined. In any case, for the next step in the analysis, the important part is the share price calculated.

The next step in the analysis is assign a value to the EXPECTED contributions moving forward of each one of the founders including the new founder. This would include cash and an estimate of the value of unpaid time expected to be invested in the company during the vesting period. Using the calculated share price from above, you issue NEW shares to each founder based on the value of their future contributions divided by the share price. The count of shares here are added to your 750,000 and founder A's 250,000. This is also where founder B gets their initial share count from.

Now that you have a TOTAL share count for each founder and a total number of shares for the whole company, you can see what percentage of ownership is roughly fair for each founder. Also, if you multiply the total numbers shares in the company times the share price determined ($0.50 in my example), that number is what VC's would call the "post money" valuation. That is, this is the value of the company after the expected forward looking effort and cash is added to the company's "pre-money" valuation.

Side Note: This process is intended to be used as a fair way to determine the percentage ownership each founder should get as a result of bringing the new founder to the table. Ideally, you would have actually formed the company like this when the company was originally started with just you and founder A. But since you didn't, I recommend working with your lawyer to figure out the best way to capitalize the company with Founder B's new money coming in and achieving the percentage ownerships desired.

How do you account for future dilution in all of this? Say the above calculation yields an equity split of 75/15/10 for the three participants. Presumably, at least two types of future events will impact those splits: 1) future key employees are hired and deserve an equity stake; and 2) cash infusion from an investor will require an equity stake. Should these be assumed at the outset and baked into the equity distribution? For example, Founder gets 51, other co-founders get 14 and 5, other key employee pool is 10 and investor assumption is 20. Or should future dilution expectation be part of how the equity conversation goes with co-founders. Example: We're going to need to give up portions of the company to future key employees and investors, and the remainder will always be split 75/15/10. Or is there a third option that's really the way it should go?