

Ask HN: How should the idea-person behind a startup be compensated? - WhoGetsWhat

A while back my sister-in-law approached me with an idea she had - or better said, she was asking why there wasn't a service that did X. After some investigating, and looking in to the feasibility of it, and figuring out possible routes of monetization, and finally building out a business plan I now have been working on the technical side of things and want to launch shortly. I am pretty sure this concept will be successful, it provides a great service to people - it's not just something I think they want, but at this point know users want.<p>The big question is, I don't know how to split equity on something like this. How should the idea person be involved? Does she get a founder status even though (and I don't mean this in a bad way) she can't contribute in any other way? I want her to get something out of this if it's successful, and it's not about greed or anything like that - but what is fair, and what won't scare potential investors away if they were for example seeing a non-founder with shares?<p>Thanks!
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Codhisattva
I'd write her a personal and conditional IOU that she gets 10% of whatever you
get from the exit. That's frankly more than fair but will surely be enough to
preserve family relationships.

And it could be a nice chunk of change for doing little more than asking you a
question. In the world of business, execution is valuable, but idle ideas are
a dime a dozen.

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phektus
You could get her to 'evangelize' with talks and maybe some cold
calling/email, if she's up to it. You'll know she'll be passionate about it,
since it's her idea and she can explain many bits of it in an intuitive way.
On the other hand, she'll be the de-facto marketing person, which should make
it easier for you to think of an equity split. She'll then get to contribute
actively to the business and you'll both be happier down the road.

