
Co-Founder or First Employee - lachose1
Hello, I know this might be a recurring question you get but I would like some help to ease my decision. Me (CEO) and a friend (CTO) cofounded a company 1.5 years ago. At the end of first year we didn&#x27;t have insane amount of revenue (around 150k) and around 20% profitability. Now halfway through year 2, we are on our way to increase revenue by around 60% this year and are aiming for a similar growth rate if not even higher because we aim to launch a new product at the beginning of year 3. We recruited a friend to help us about 6 months ago and he is receiving normal market salary but has been contributing a lot to the company in terms of energy and ideas. Recently, he asked us if he could join the company as a cofounder and asked for 30%. The thing is I do not see him as a cofounder since he joined when things were less risky and the salary he is already receiving. I understand we are not necessarily unicorn level with our revenue, but since we are already generating profits are a aimed in a right direction, I am not sure how to deal with his request. My feel is that he shouldn’t get more than maybe 1% for being an early employee and that’s it. I think he might feel insulted by this offer and leave which would cause us some temporary problems in terms of project delivery, but it wouldn’t be catastrophic. Am I being selfish? I feel like I would much rather keep my equity for more important people hires in the future (strong business development person, etc.) as well as potential investors.
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seniorivn
Agree 100% If he didn't invest(risked with you) and is replaceable, there is
no reason to treat him like an investor/co-founder. But, I believe that you
should cut about 20-30% for important employees, I imagine he is one of them
since he is the first.

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lachose1
Exactly, we already planned to open a chunk of equity for key hires in the
upcoming years. Around 15%.

