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What about: Founder A has $10,000 to invest. Founder A lends $5,000 to Founder B (at some agreed interest rate) and both founders invest $5,000 each, both gaini

• brudgers 14y ago
  The people involved determine what is fair not me. However, I can see some factors to consider in regards to the personal loan. First it prioritizes cash over effort. This expresses a lack of faith in the startup. Second nothing poisons personal relationships like debt. Third it means that B has an incentive to quit and get a regular job earlier in the company's life cycle because he has an additional bill to pay. Arm's length marriage is not a good idea. I think the personal loan makes a hash of things. Suppose founder B writes the critical piece of code? Should he require founder A to pay for it? Suppose he makes the critical sale, should he get more equity? Founders bring different resources to the enterprise. If one founder is unable to contribute a critical resource, the sensible options are to find a working source or forgo the enterprise. If you must have your money back, don't invest in a startup.