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Reality check... you just gave B the job of deciding how much equity he should have while you're busy doing the actual work of starting the company. That's like
by trevelyan 16y ago
Reality check... you just gave B the job of deciding how much equity he should have while you're busy doing the actual work of starting the company. That's like paying someone to pick your pocket.
If you don't know how much these people are worth, it is probably because they aren't doing work that is of any tangible value to the company yet. Sure... they'll be invaluable to the company in the future. Everyone is. But do yourself a favor and get them to articulate exactly what it is that they will do and tie a value to THOSE milestones. Then link their vesting to hitting those clearly-defined milestones. And make sure those milestones push the business forward and don't include random stuff like "define equity split".
- petervandijck 16y agoDon't give people equity if they don't have work to do RIGHT NOW that you ABSOLUTELY need them for. If not, wait. Every day you wait means their risk goes down and they will get less equity. Do NOT give people a part of your company because you think you'll need them "later" and because you think they'll pull their weight "later".
- petervandijck 16y agoAmen to that reality check. The more I read this, the more I think you're shooting yourself in the foot with this setup.
- DevX101 16y ago"link their vesting to hitting those clearly-defined milestones" Great advice here. If I bring on a business guy who claims he can land the first 10 major accounts that will be critical for the business, that's all well and good. But unless he's a proven rainmaker I wouldn't give up equity unless it's vested to hitting these key milestones. And by the way, don't put this off as a "task" to your secondary business partner. Both of you need to sit at the table and discuss.
- petervandijck 16y agoQuestion: I hadn't heard of vesting based on milestones before. Is that really a commonly used option? Since milestones are so hard to predict, and depend on lots of factors, not just the work of that one person. What would an example of a clearly defined milestone be?
- clistctrl 16y agoThanks, this kind of rings to the first thoughts I had.