Ask HN: Knowing how much equity to split when your co doesnt do the tech?
Ive worked on building the platform and validating the idea. He's been getting an audience engaged. I want to do an equity split soon but dont know how much I want to give but want him to be as involved as possible!
1 comments
If you’re early and there are two of you do 51/49 so you can break a tie before investors get involved. Don’t forget the standard 4 year vesting with 1 year cliff for both of you. There is so much non tech stuff to do in a startup you really want them all in as soon as possible. This should all be part of a proper operating agreement document and the sooner the better.
Great answer, but one thing we need to know before we can offer a split is how much "skin each person has in the game".
The OP stated that they have been building product while their partner builds an audience. That could be a 50/50 split for sure. In fact, it could easily be a 20/80 split if the time invested in the product was minimal compared to the time invested in customer acquisition.
Additionally, validating the idea is not the same as having or presenting or articulating the idea.
To determine a split you should jointly determine the true value that each partner has invested at risk.
The OP stated that they have been building product while their partner builds an audience. That could be a 50/50 split for sure. In fact, it could easily be a 20/80 split if the time invested in the product was minimal compared to the time invested in customer acquisition.
Additionally, validating the idea is not the same as having or presenting or articulating the idea.
To determine a split you should jointly determine the true value that each partner has invested at risk.
This is a wrong-headed way of thinking about it in the early stage, IMHO, because it gets everyone into the mindset of I do x, and you _only_ do y, instead of the mindset of what I bring has no value by itself and what you bring has no value by itself but _together_ the knowledge, skills and hard work we bring are worth something.
It’s almost impossible to predict (or even tease apart afterwards) what things increased value and what did not. So forget about trying. Understand that ventures are risky, and focus on getting from zero value to something of value.
If you’re seriously concerned that your partner isn’t fully dedicated, an uneven equity split won’t fix that.
It’s almost impossible to predict (or even tease apart afterwards) what things increased value and what did not. So forget about trying. Understand that ventures are risky, and focus on getting from zero value to something of value.
If you’re seriously concerned that your partner isn’t fully dedicated, an uneven equity split won’t fix that.
I remembered that this is essentially Joel Spolsky’s thinking, as well:
Equity for Startups https://gist.github.com/isaacsanders/1653078
Equity for Startups https://gist.github.com/isaacsanders/1653078