
Equity for cofounder - zurvania
My startup went through a very prestigious accelerator, during which, my co-founder left. This resulted in a solo founder company throughout the program.<p>I hired a few friends (as contractors) to help during the course of the program and by demo day, the company has become quite attractive to investors.<p>I am thinking of bringing on one of my contractors (he is also a friend for about a decade) as a co-founder. 
I&#x27;ve been advised to give up to 10% with below market salary (vested with cliff), or 5% with market salary. I can&#x27;t afford paying market so my questions are<p>1) Is 10% good for a cofounder? If not, what would experienced entrepreneurs suggest?<p>2) Would a ramp vest over 4 years be recommended ( Year 1 - 1% (with cliff), Year 2 - 3%, Year 3 - 6%, Year 4 - 10%)?<p>3) Would it be beneficial to change the vesting schedule to 7-10 years (instead of 4) and vest ~1% a year (with a 1 year cliff) ?<p>4) Is 10% too generous over the lifetime of a startup? (Financing rounds (3 rounds at 20% each), 7% for accelerator, 20% for employee pool) This leaves a total of 13% (in an average case) between founders  - so really should be 6.5% each between the two of us.<p>Thank you for answering
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samstave
I would NEVER join a company, esp. as a co-founder if my vesting was over 10
years for 10%. Nope.

and as @sharemywin states, at 4) he is fully diluted - and would happen way
faster than his vest schedule. Especially. given its just the two of you and
you still need to build a company, hire people, raise money....

I think the whole proposal is bad. What I would do is give him more - and then
when you bring on other entities (investment/employees) the future equity come
from your both positions.

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zurvania
Hi samstave Sounds like the vesting schedule might be problematic. Would 10%
over 4 years still be bad, out of curiosity, from your perspective?

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samstave
Options vesting over 4 years is pretty much the only vesting I have
experienced in my 23 year career.

25% vested after year one, then the remainder vesting each month there-after.

This may help:

[http://www.businessinsider.com/everything-you-need-to-
know-a...](http://www.businessinsider.com/everything-you-need-to-know-about-
cliff-vesting-2011-5)

As should this:

[http://www.businessinsider.com/everything-you-need-to-
know-a...](http://www.businessinsider.com/everything-you-need-to-know-about-
cliff-vesting-2011-5)

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tlb
1,2) Probably yes, depending on your situation.

3) Probably not.

4) Ownership doesn't work that way. When you do 3 funding rounds at 20% each,
you're left with 51.2% (1 - .8 _.8_.8) not 40%. The co-founders 10% would be
diluted to 5.12%.

The accelerator you went through would be the best source of advice for 1 and
2, since they know your situation.

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sharemywin
On point 4 his/her 10% would get diluted.

