My first reaction to this plan is 'this is not a cofounder.' While the deal you describe might work fine, you're not setting things up for an equal partnership.

My first reaction to this plan is 'this is not a cofounder.' While the deal you describe might work fine, you're not setting things up for an equal partnership. I would suggest if you move ahead with this plan, you talk about and consider the relationship to be 'key technology hire,' and carve out 15% or so for him, on a short vest, PLUS make up the difference in his market rate with stock, vesting as he earns it. Choose a low valuation so that you can be friendly later in life if this is successful. I personally believe in reverse-vests for a super early hire like this: give him the chunk up front, and execute a (pre-agreed-on) clawback if it doesn't work out in the timeframe you guys agree on. Anyway, I don't think it sounds like you have the attitude needed about this person to bring him on as a full co-founder. If you call it that, and it's not a co-founder situation (as in, you both bring an equal say to the table and are roughly equivalent in value to the corporation), one of you is going to be unhappy. My 2c.