Ask HN: What equity stake is realistic as a technical co-founder?

https://news.ycombinator.com/item?id=3440661

by cobychapple • 15 years ago

2 3 15 years ago

news.ycombinator.com

I'm a designer and developer who has been approached by someone locally about being the technical co-founder for a web-based business. I get on really well with the guy, he seems to know what he's doing from a business point of view, and I think the business is potentially very profitable.

My question is this: as the person who is designing and building the site/application on which the entire business depends, what kind of equity stake is realistic to expect in return?

jacksondeane• 15 years ago

If you are going to be building the entire product, and not being paid a salary, you should have something around equal equity with your co-founder. If you are going to be paid, discount the equity split to something more fair based on how much you are being paid vs. what you normally make for your time (how much you are sacrificing by not having a full time job).

They might argue that it is their idea, I argue its mostly in the execution, which you will be a large part of.

kls• 15 years ago

They might argue that it is their idea, I argue its mostly in the execution, which you will be a large part of.

Right the mantra around here that ideas are worthless exist for a reason. I would go even further and evaluate what the other person will be doing while you are building the product. If the answer is be the idea guy until it is done then he is going to market it, then I would argue that even 50% is too low. Because you could build it, and then get a sales guy to push it for 10% of the take after it is done. Now if he will be doing business dev and other work while you are working then I would say 50-50 is the right split.

cobychapple• 15 years ago

Thanks for the replies! Not sure if this changes anything, but here's a little bit more background info.

The business is web-based, but will not be profitable without a large amount of offline business development which the guy in question will be doing. It's also quite a niche business, and as this guy has previously run businesses in the industry he has the contacts/networks in place that stand to get this business off the ground.

Thanks for your input!

Ask HN: What equity stake is realistic as a technical co-founder?

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