
Ask HN: How much Equity should I give my co-founder? - max_
Hi guys I wrote the the whole backend and front end of my application(alone).<p>Is co-founder necessary (an investor is insisting it is)? if yes? how much equity should i give him? &lt;10% ? 50%? what is ideal?
======
onion2k
_I wrote the the whole backend and front end of my application(alone)._

Cool, but the technical aspect of a start up _usually_ fairly irrelevant. It
has little impact on your business's success. There are times when it's
important (if you're solving a hard problem) but if your app is essentially a
CRUD app (users register, enter data, get data out, maybe with a process in
the middle) I wouldn't get too hung up on who wrote the code that's there now.

 _Is co-founder necessary (an investor is insisting it is)? if yes? how much
equity should i give him? <10% ? 50%? what is ideal?_

The investor wants you to have a cofounder so that the business will move
forwards when you can't put time in (eg if you get ill). That lowers their
risk. Plus, when you're both working on it, things go faster. How much equity
that person should have depends entirely on what you negotiate with them -
there isn't a generic ideal that works for every startup.

One thing to note though, while the work you've already put in represents some
value, it's not very much compared to how much you and your cofounder will put
in during the life of the business. If it takes 10 years to get to an exit
then you'll each be putting in a vast amounts more work than you've put in so
far, so there's no good reason why the work you've done to date should have
any significant impact on the reward you'll take away at the end. To that end,
a 50/50 split is quite fair.

------
brudgers
Is the person insisting on a cofounder an actual investor or a potential
investor? An actual investor is someone who has already provided money. A
potential investor is anyone else from an Angel with a track-record to the
cashier at the local Waffle House.

My gut reaction is that the process of bringing onboard a cofounder is
significant. A context in which it is done so reluctantly is one red flag. A
context in which it is done hurriedly is another. The acceptability of these
distractions is a third.

My basic heuristic is that unless someone brings 50% of equity's worth of
value _and_ is 100% trustworthy, it ain't worth cofounding. Obviously, if a
person meets those requirements then their worth 50%. To put it another way, I
think unequal shares are a liability to a cofounder relationship.

The ideal is an organic partnership and there is no giving. It's worth
reframing the event as founding a new company.

Bringing on an additional employee as owner is a pretty big term on the term
sheet. This may be a case of a poor fit between your company and the potential
investor.

Good luck.

------
MrAnderson92
What do they bring to the table? Business knowledge? Marketing? Anything? That
would decide what they are worth.

~~~
max_
He's a smart creative guy and fantastic networker.

~~~
brudgers
1\. If the company was already funded would the candidate be the first hire?

2\. What is the candidate's industry experience?

3\. What are their technical skills?

4\. What is their track record?

5\. Have they already tried to do a startup by themselves or others? If not,
why? Otherwise, what did they learn?

6\. Why have they founded a startup with cofounders they know? This has two
aspects: is the candidate really prepared for the work? are the people who
know the candidate best uninterested in working with them? It is particularly
relevant for someone whose expertise is in networking.

7\. What has the person created?

8\. Who is in their network [other than the potential investor]?

