Sharing equity with business partner
Hey HN. I am relatively new to the site and have been reading for the past 4 months or so. As Im in the process of forming my startup, I came across a question I felt was worthy. I brought a business partner on board and we have been working together on my idea. My idea was already created before him and he had signed an NDA. He has been there now for about 2 months helping bounce back ideas. He brings strong connections and a great wealth of knowledge. He's also a good friend, however we have no agreement on compensation. I know there will be a day when we receive funding and he will probably ask for equity or something but I was curious if this is something I should try and settle now or later?
1 comments
Settle now. State your intentions and expectations and make sure both of you are on the same page. That "good friend" can head south real quick when the cash registers start ringing and disagreements arise at that point.
Good point. Do you have any insight on how much I should be giving him? Obviously I plan to retain 51% and leave the rest for funding. I obviously cant offer him much, is there a standard?
Paul Graham has a good essay on the subject: http://www.paulgraham.com/equity.html
I highly recommend reading his other essays as well.
I think Joel Spolsky also wrote on the subject.
I highly recommend reading his other essays as well.
I think Joel Spolsky also wrote on the subject.
Thanks I will check that out.