

Ask HN: How to split equity share for non-technical and technical co founder? - notastartup

Non-technical: Has entrepreneurship experience. Has sales experience. Knows key people for the market (Korea). Has acquired a first customer through there.<p>Technical (me): Has engineering experience. Has experience in designing, building and shipping software. Does not know the market well (foreign market) but has a good idea of what to build and deliver.<p>Is 50&#x2F;50 good or should I be taking less equity since the market validation and possible sales and marketing channels exists and accessible to only the other non-technical founder (I don&#x27;t speak Korean very well lol).<p>The market we are targeting is already big in North America and Europe but not in Korea. I don&#x27;t know  anyone in Korea, I have to rely soley on the other non-technical founder.
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brudgers
_I don 't speak Korean very well_

Your cofounder probably doesn't write Ruby,JavaScript, Haskell, whatever very
well.

This should be a business decision not a negotiation.

The ideal equity split creates value. The only means by which it can do so is
to make future success more likely. It's not about rewarding the past, it's
about making sure each person carries as much load as they can going forward.
If you do a 60-40 split is one of you going to do 50% more work?

If your startup pivots, do you clawback equity from the idea guy?

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allendoerfer
I would go with 50/50 and focus on both committing as much as you can. I think
this way, both of you will get the highest rewards in terms of absolute
equity. Start simple and just execute.

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liamgooding
Another perspective is go 51/49 (CEO 51, CTO 49) just so that later down the
line you can resolve any "deadlocks". With 3 founders you'll never have this
occur, but with 2 cofounders you will.

Remember you'll make a 10% employee/advisor pool and probably 10% to an
Angel/Seed, making your 51% to 49% become 40.8% to 39.2%

By the way, we're all assuming that you'll both be committing to this 100% and
full time. If not then a 50/50 split isn't right

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brudgers
It is better that two partners reach agreement than that one has total control
of the company, and that's what 51% is, total control. The 49% serves at the
51%'s pleasure. 51% can sell the company to their cousin for a pittance. 51%
can decide the CEO's salary should be double the CTO's. 51% can put their
daughter on the payroll as a consultant.

All 49% can do is take it or walk away.

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notahacker
50/50 is good.

Less may also be fine if he thinks he brings more to the table, but as that
makes you more a contractor paid in equity than a founding partner you should
probably expect to be paid something in cash too...

If he's offering you a significant share of the business _instead of_ cash,
that says something about how highly he values your ability to deliver or how
uncertain he is of his own ability to get it to profitability with paid
freelancers; probably a bit of both.

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iamwithnail
Unless oNe of you is coming to the project having done a significant amount of
work (product development or research) then I'd just go with 50/50\. Just do
it. If you agonise about 10% or so either way, it'll just be a bone of
contention and one of you will resent the other. Assuming you're both going to
be doing the same amount of work (I.e. You're both full time), it's difficult
to argue that you should come up with some more fine grained split.

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IndieDevClub
This sounds like a bad idea.

If it's big in North America and Europe one of those competitors will be
entering Korea soon. If they don't enter Korea there's a reason for it that
involves the specifics of that market. But you wouldn't know those specifics
anyway because you know nothing of Korea.

Unless you trust your cofounder like a brother, I wouldn't go for it.

