Ask HN: How to determine shares between two founders of a startup?

https://news.ycombinator.com/item?id=9751565

by ameesdotme • 11 years ago

3 3 11 years ago

news.ycombinator.com

Hello Hackers,

A friend and me are launching our startup to the public soon, after which we'll start looking for investors. This got me wondering about what would happen if the platform 'exploded'. How do you determine salaries and what if you get into a fight, for example.

How did you determine shares and roles in your startup? Is this something I should worry about in the early stage of the startup? (We have been working on this for two months now.)

Our work is distributed as following:

Me: Creator of the initial concept, software developer of the platform.

He: Joined later^1, UI- and branding- designer of the platform.

^1= The platform used to be a simple tool I built, I then decided to make a startup out of it, after which we had a brainstorm and decided to work together.

I'd love to hear about your experiences in this.

Thanks!

aurizon• 11 years ago

Be wary of people who want large amounts of $$ and are not interested in shares. Reserve shares for valuable contributors at the start. later the cleaners can get some shares.

read a few of these https://www.google.ca/search?q=startup+share+structure&oq=st...

brudgers• 11 years ago

Spolsky's advice:

https://gist.github.com/isaacsanders/1653078

tixocloud• 11 years ago

With regards to roles, it's good to lay out what both of your strengths and weaknesses to figure out who should do what. In my personal opinion, both should really get good at sales and building relationships.

With regards to determining shares, it's a tough one and I hate to say it but it really depends on many things such as your relationship with your co-founder, what his motivations are, how willing is he to work his ass off knowing he has less equity than you, how hungry you are in ensuring the entire startup takes off regardless of what the equity split is, etc.

For our startup, we're a team of 2 and I'm the one who came up with the idea and convinced a buddy to join me. I'm also the technical person and have a better understanding of the problem we're trying to solve. Although, I've been putting in most of the work at this point in time, I need a team to succeed and I value my buddy's skills and future contributions. I need him to be interested enough to stay in the game because ideas are essentially worthless while execution is everything. I've decided to make him an equal founder to keep him onboard. Am I leaving money on the table? Quite possibly - but if I have no team, my startup will fail for sure. In the long run, if we do make it, our shares are going to be diluted but it's better to have 10% of a $100 million startup than it is to have 100% of a $1 startup.

Hope that helps. Good luck!

Ask HN: How to determine shares between two founders of a startup?

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