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I'm a single solo founder. How much equity should I give to new cofounders / partners?

I'm a single solo founder. I've conceived the idea and have already developed the entire product myself, and am ready to launch. This is not an MVP- it's a full-blown product that's complete. However, I don't have a team. I'm looking at getting another partner to join me in this venture. He'd take on the CTO role; whereas I'd take on CEO / marketing / business development / etc. His main duties and responsibilities would include: -Maintain the product and add new features -Attend networking events with me -Attend pitch competitions / startup conferences with me How much equity would it be worth to give him? P.S. This is a software product; a web application.

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Answers

Kelly Fallis

CEO at RSMuskoka.com

Why on earth do you need a CTO for that job description? If the product is done, funds aren't likely an issue and you don't need a team to pitch @ pitch competitions if you functional and presumably decent product. Sounds like you need a product guy which you could easily hire who could network with you and avoid title and paying s/he more as well as save your equity. Just a thought - no need to give away the house!

Answered over 9 years ago

Andy White

Indie.vc Scout, Investor, Data Science Alliance

When bringing in a new cofounder it's important to give them an opportunity to earn their equity. Typically this means a vesting schedule over a certain period of time. For example you may decide on an opportunity to earn 10% of the company over 4 years with a 1 year cliff. This means there is no equity earned for the first year. After the first year they would immediately receive 2.5% (for the previous years work) and then a prorated amount (.2%) each month after until the end of the fourth year. This helps everyone's incentive stay aligned.

Now, in your situation it's important to understand why you want a CTO cofounder. From your description it sounds like you already have everything you need. Think about this first.

If you still want to find a tech cofounder then consider the following when making an offer:
What you would want if you were them?
What are they giving up to join you?
What will build a long term relationship?
What is the company worth without them?

The amount of equity can be supplemented by a salary, amount of time committed, or other compensation. Without knowing the specifics it's very challenging to give an exact % answer.

Answered over 9 years ago