5 ms·
Ask HN: How much equity should I ask as technical cofounder?
Hi there,
I'm creating a startup with a good friend (15+ years).
He is non technical while I am a computer scientist and considered brilliant in my field.
At the beginning, he had a totally different idea in a totally different field, but I explained
him why it was nonsensical (guess what, it was about blockchain).
Then he had an "idea" that was the combination of
1) a ~technology I introduced him to for the first idea (more like a CS field than a technology)
2) a field it could be applied to
But his idea was really confuse, it was just the combination of two concepts.
We worked a lot together to make it work (3 months, about 10-15 hours a week).
I believe very few people could have done this much:
- He would never have been able to understand anything of the technical part, and I suppose
nobody in the scientific community would have given him so much time and attention like I did.
- I would never have had the will to investigate that, and he was more focused on the business
part than I am.
Honestly, I think our contributions are quite balanced, but now our idea requires
to have some relationships with regulatory authorities, and as a matter of fact,
my friend's father is rich and influential (mine are not poor and have relationships,
but it is really not comparable). His father wants to invest a lot of money in our project
(2M for the first 6 months).
(see the rest below in the comments)
- Labo333 9y agoBesides, I am still studying (while he is "unemployed") and want to study next year (September 2018) in another country (1 hour by plane). He was worried a lot about the fact I wouldn't be able to work on the idea, but I promised him I would be as much available as I can, and that I just needed to go to the university for the exams (which is true) and could handle my thesis by emails. So I'll be a but sacrificing my degree for our project. Now, we are discussing about the shares, more precisely what our relative repartition should be after some rounds of founding. I said 40/60 while he said 33/66. I feel bad about the fact he would have twice as much as me. He said he was the one with the ideas, and that although I always had all the answers to his questions, the questions are more valuable. I don't think it is true, IMO I asked him the business related questions while he asked me the technical ones. It is just that he had a lot more questions because… well… business people don't know anything, while business is easily understandable and I have a broad experience that allows me to understand it. So in a sense his argument is just that BECAUSE I have more knowledge I contributed less. He said he only came to see me as a technical consultant and that 33% was already a lot. He also gave me a lot of examples of companies where the technical guys don't get much shares (Amazon, Facebook, etc…), and I must say I begin to have doubts. What do you think of: - the right repartition of equity - how I should react Thanks :)
- pcarolan 9y agoHe sounds like a jerk and you're going to have to spend a lot of time with him. Walking away should be an option.
- Labo333 9y agoI don't think he is a jerk, but must admit I was surprised by his reaction. I wouldn't entrust him with the business part is he was too soft either, so I guess it is ok.
- tboyd47 9y agoIt sounds like a very UNbalanced partnership. The financing is coming all from one side and the work (assuming your startup is software related) will be done on the other. He is being truthful with you when he says 33/66 is a lot for you. IIRC the split between Jobs and Woz was much more lopsided than that. If I were you, since he has access to money, I would just enter into it as Employee #1. Ask for a decent yearly rate, a C-level job title, and stock options. Set your hours firmly and don't overwork. Work for the long haul.
- Labo333 9y agoIn fact, it is possible for us to find money in a lot of other places, and I think his work is at least as important as mine. It would be easy for us to get 500k from external investors. Plus, I'm not in need for money, so I don't care about a rate. For the moment he is CEO and I'm Chief Scientist. That is why I don't think the money is the big deal here, and even he didn't talk much about it because he knows that. It is a software related company, but much more a scientific company (about cryptography and machine learning). Yeah the split between Jobs and Woz was one of his arguments, but do you think it was fair? Would you do the same as Woz?
- tboyd47 9y agoAs technologists we are always in this weird state of being seen as both invaluable and replaceable. You are doing him a favor by working with him for free for this long.
- Labo333 9y agoSo, I investigated the split between Jobs and Woz, and it seems that it was 65.4/34.6 at the date of the IPO (p. 22 of https://wiki.epfl.ch/a3-angels/documents/reunions/a3angels07-herve_lebret-equity_split_study.pdf https://wiki.epfl.ch/a3-angels/documents/reunions/a3angels07...). But when the company started, the split was 45/45 (10 for Wayne) (http://www.foundersatwork.com/steve-wozniak.html http://www.foundersatwork.com/steve-wozniak.html). Steve Wozniak was not interested in money, that is how I explain the difference. Still, even at the time of the IPO, the split was slightly more than 33/66.
- deleted 9y ago[deleted]