I am currently a sole founder of a startup, which has not even been incorporated. I have a good idea of market fit and have developed a simple prototype so far. Still a side project but have started looking for some angel funding. I am technically competent but would like to bring on board someone with niche and specialized knowledge. Of course he/she will be a cofounder , but I am really hesitant in sharing 50% away. Reason is : I am soon going to be full time on this, but the other person might not be. Also can never be sure of his sustained contributions. In general I am concerned about what if things don’t work out with him , about the exit options etc. The other option is to just get part of the work done on upwork etc. and stay solo. Thoughts?
Why 50%? Equity isn’t given away, it is exchanged for something of equal value. Any agreements you enter into should have buy back provisions, etc. Talk to your lawyer before making any promises around equity.
At least don't give 50%. Give 49.9% and keep control. And only give half if the other person is going to be a real co-founder
How many paying customers ?
0
Is it b2b or b2c ? If b2b too early to think about founders and such. Try getting one or two customers
I would highly recommend using Gust Equity Split Calculator to determine how much exactly you should give away from ur startup to another co founder... There is lots of ways to calculate each co-founder equity shares specially at the beginning, and both of you should agree on it before stepping any further to avoid crashing later
To establish equity identify 1. What the business person will contribute. 2. You can vest it in a yearly structure. 3. Create a board where you have ability to control other cofounders but build trust in them. 4. There is no product market fit without having paying customers or at least substantial customers using it. 5. Bottom line: have you diminished some risk already, if so how much and how much will the person contribute will determine equity. Good luck!
You don’t need to give 50% away or have a cofounder. You can hire people in equity. I’ve done this and am currently doing it again.
Is it no pay - Equity only ? How do you decide the Equity percentage to be granted / timeframes when it would vest ?
Feel free to dm me