4 ms·
Hmm an offer of 5%-10% when they have nothing with no salary is exceedingly low. Especially since they only an idea…. If you join, you’ll be working together fo
by Blackstone4 5y ago
Hmm an offer of 5%-10% when they have nothing with no salary is exceedingly low. Especially since they only an idea…. If you join, you’ll be working together for the next 3-5 years to get this off the ground and you might end up resenting such a small amount of equity. Either take a small equity stake (5-10%) and a below market salary. It sounds like you are happy with no salary (I guess they are too), in that case I think 25%-33% would be more reasonable. If you and the brother go with 30% each, the idea guy would get 40% so 33% more than you. If you both go 25%, then he would get 50% so double what you guys have…
With regards to him putting in cash, agree a pre-funding equity split and valuation then adjust it for the cash investment shares amongst the co-founders.
I like what another poster said. If you earn $100k pa then that is roughly your market value and you ought to get equity equivalent in lieu of that. It’s a good way of making your case for 33%!! Ultimately only accept what you would feel happy with in 1-2 years time when the going gets tough and it’s hard and you feel down.