Ask HN: How much equity should I give to a non techie founder?

https://news.ycombinator.com/item?id=1677176

by skowmunk • 16 years ago

3 9 16 years ago

news.ycombinator.com

The short of it:

What would be a reasonable amount of equity that I can offer him?

The long of it:

I am considering bringing in an old friend as a co-founder. These are the facts:

Though he had done quite a bit of programming on FORTRAN at university level (MS) he is not from IT background.

He has been a very good sounding board for many years for me and a source of lot of practical advice, including when I started my previous company.

He can be very straightforward (which is important) and tells me when I might be wrong.

He has got loads of practicality, good discipline with managing money and time, good at dealing with people, on all these accounts he is better than me.

He doesn't have people managing experience.

The idea is mine. Initially, I will be doing most of the development before I can bring in the employees of the older company. I am the one who is ready to bankroll the company to the extent I have to and am not expecting him to shell out any money.

The main reason I would like to bring him in is to avoid single perspective decision mistakes, speed up my decision making process (which is lot easier when I have somebody to talk to and understands the stuff) and speed up implementation by splitting up non-technical tasks (inlcuding managing employees, resources and project timelines)

toast76• 16 years ago

I may be mistaken...but a "sounding board" doesn't seem like a great role in a company. If he's not technical, not a designer, not marketing, not providing cash...what's he really going to be doing?

Towards the end of your post you say he'll be managing employees, yet it sounds like you don't have any, and he doesn't have any experience managing staff anyway. Managing people isn't something that you just pick up on the job.

To be honest, it sounds like you're looking to get a mate involved...just because he's your mate. Don't get me wrong, that CAN work (my co-founder is a friend, but he's also the designer "ying" to my developer "yang"). I'd just be concerned that your mate doesn't appear to have any relevant skills to your business beyond being good with money a being good listener. These may be important things in the long run, but when you're trying to get a product to market, you need your co-founder doing everything that you can't.

I don't mean to be an alarmist, and I may be making some incorrect assumptions...but I wouldn't be offering any equity to someone who isn't going to CREATE equity.

skowmunk5• 16 years ago

I appreciate you saying whats on your mind. You have very valid points.

Ideally I would want somebody who could bring strong readily usable skillsets. Two other long time friends-advisors (one in software marketing, one a software whiz) both have heavy constraints against making a risky move such as joining a startup.

I have some very strong strengths and some very strong weaknesses. The thought behind going for this friend is, if I can't find somebody I trust, who can bring strong strengths along with being able to counter my weaknesses, I might as well as bring somebody in who can counter my weaknesses. And this guy can do at least that, if he is willing to join and really contribute.

Unfortunately, one of my weaknesses is building rapport quickly with people:). I am working on it, but can't bank on becoming good at it fast enough to build a good team quickly.

rdrimmie• 16 years ago

Sounds more like an advisor than a cofounder. I'd look into typical advisor compensation and go at it from that angle.

jon_dahl• 16 years ago

Agreed.

(Typical advisor compensation is 0.1%-2%, depending on the stage and the value provided.)

skowmunk5• 16 years ago

Thanks for the numbers, I was planning to ask rdrimmie if he could suggest some numbers.

skowmunk5• 16 years ago

yes, so far, with my previous company and this one, he has been more of an advisor than a co-founder. Though I have lot of faith in his inherrent capabilities, I do not know to what extent he can or is ready to push himself to apply them in this field. That is an unknown quantity for now.

ketanb• 16 years ago

You need to put down what all tasks this person can do without spoon feeding. How can he manage resources if he is not technical? What would he manage without any skills? He would have no clue about what is going on with the products and all technical challenges team is facing.

He doesn't seem like a right advisor/mentor. If was one then he would have advised you right away that he is not a right fit for this job.

skowmunk5• 16 years ago

That was the first question he raised when I first proposed about him becoming a partner - "What would I be able to bring to the company?", its because of such questions that I value his opinion.

Thats true, I would not be able to afford to spoon feed him about what he can, he should or how he can do different things. I would have to spend more or less full time on development, finances and customers. He would have to be a self starter and go about trusting his own instincts, if he joins this company. But currently it looks like I have more trust on his instincts than he has on them (at leaast with respect to this venture)

skowmunk5• 16 years ago

toast76, rdrimmie, jon_dahl and ketanb, thanks for the advice.

Ask HN: How much equity should I give to a non techie founder?

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