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I'd like to bring in a good friend of mine who I believe can contribute This is the key sentence. Work together for a month, with no equity. See how much this
by alain94040 12y ago
I'd like to bring in a good friend of mine who I believe can contribute
This is the key sentence. Work together for a month, with no equity. See how much this potential co-founder actually accomplishes. You'd be amazed by the gap between what you dream may happen and what actually happens. Success is hard.
If after a month, you are still super-excited about this co-founder, start discussing an equity split. Always with vesting. No cliff (or very short, that was what the 1-month trial period was for).
If a co-founder doesn't receive a salary, then the minimum equity split would be 90/10, all the way to 50/50. FYI, at 90/10 I would behave like a super-adviser, but not a fully committed co-founder. 75/25 is the first "true co-founder" deal I can think of.
- tptacek 12y ago"No cliff" is wishful thinking. Everyone has had the experience of hiring someone who ended up not working out. It almost always takes more than a month to come to that conclusion, and a little longer still to act on it. And finding a viable cofounder is harder than hiring. Having someone who worked for you for a couple months walk away with tens of basis points of ownership is a pathological situation, not something you should deliberately optimize for.