Prenups for Startup Founders: How to Share Some, Not All, of the Business

If you own a startup before marriage, you may want to protect your ownership while still recognizing your spouse’s potential contributions to your future success. California law lets you decide what remains separate and what becomes community property. A well-drafted prenuptial agreement can define a middle ground that avoids default rules and future conflict.

Here’s how to structure an agreement when you want to keep most of your business separate but allow some of it to be shared.

Start with a Baseline

Identify what you own before marriage. This includes equity, IP, trademarks, customer lists, and any unvested options. This forms your separate property foundation.

Decide What to Share

You don’t have to choose all or nothing. You can make specific parts of the business or future value community property. Here are a few ways to do that:

Share appreciation above a threshold

You can agree that the first $1 million of appreciation remains separate. Anything above that becomes community property and gets split equally if you divorce. This protects early risk while sharing long-term upside.

Share liquidity, not ownership

You can keep 100 percent of the business as separate property but agree to share some of the cash if the company is sold or you receive distributions during the marriage. For example, you might agree that 25 percent of any net payout during the marriage becomes community property.

Provide a fixed community reimbursement

If your spouse will support the household while you work long hours, you can include a flat payment in case of divorce. For example, after five years of marriage, your spouse receives $250,000 as recognition for that support. This avoids valuation battles and honors their contribution.

Use a split-growth formula

You can apply a simple formula to divide appreciation. For example, you get a 6 percent annual return on your premarital business value. Any growth beyond that is community property. This mirrors how courts might divide a business but does it upfront, avoiding a fight.

Make future compensation community

If you’re receiving new stock grants or options after marriage, you can agree those are community property, while keeping the original business separate. This works well when equity is tied to continued service.

Plan for clarity and track it

Whatever you agree to, spell it out in plain language and keep good records. Use regular valuations, document distributions, and track equity grants. That way, there’s no guesswork later.

Conclusion

You don’t need to hand over half your startup to be fair. A thoughtful prenup can protect your hard work while acknowledging your spouse’s role in your life and business. When done right, it keeps your intentions clear and your partnership strong.