
Ask HN: How much equity to give a new (3rd) cofounder, ~1 year in? - cowpig
Came up with an idea in Feb last year, and did a bunch of market research and worked out a basic technical plan over the next few months, part-time, with my friend.<p>The two of us started working on it full-time about this time a year ago, and are just about at the MVP stage--we&#x27;re planning on doing an alpha launch this month. We effectively haven&#x27;t raised money and consider ourselves 50&#x2F;50 partners.<p>Two weeks ago, I was talking to someone who has been working on a SaaS product in the same space for the past few years (in Europe; we&#x27;re on the other side of the ocean) and was about to release it. I offered for him to fly out and work with us for two weeks before he launched to see if he wanted to join us instead.<p>Working together has gone pretty well, and we&#x27;re asking ourselves: what would be a fair&#x2F;standard distribution of equity in the following scenarios?<p>1) He launches his product, and joins us a co-founder. Assume that maintaining it would probably take up about half his time for the first ~6 months and then gradually reduce to very little.<p>2) He doesn&#x27;t launch his product, and instead folds his work into what we&#x27;re doing. Our project is much larger in scope and his SaaS product could be re-purposed to fit what we&#x27;re doing (as a fairly small component of what we&#x27;re building), if we are successful.<p>Our project has a $BN ceiling, and is much more ambitious in scale, and is very high-risk. His product probably has a low-to-mid 6-figure revenue ceiling, is low-risk, and the market is likely to mostly disappear in the next few years.
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yousifa
You are effectively at square one if this becomes successful. In the end it's
all about agreement between you three. In my opinion if this is a person you
value enough to join you as a cofounder at this early of a stage, and he will
be putting in the same amount of work as you and your other cofounder, I would
suggest making him an equal or close to equal partner.

If you don't see him as valuable as your other cofounder, you can always offer
a significant equity package as a first employee. I know the difference may
just seem like a title at this stage of the company, but it makes a difference
in terms of what kind of information and decisions he will partake in and the
magnitude of volatility in the emotional startup-wave he will be riding is.

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ScottBurson
I don't know if there's a "standard" answer; this seems like a pretty unusual
situation. I think you should start by asking yourselves how much of a
difference it will make to your chances of success if you reach agreement vs.
if he walks away. Don't underestimate the value of an early revenue stream --
if his product can be launched quickly and brings in some money, even if its
ultimate potential is small, it could be of tremendous help in supporting you
while you work on your more ambitious project.

