How much equity should I give a part time founder?
One: Don’t give up free equity In startup world, giving 1\% to an advisor is okay. But it’s still a huge chunk if the company makes it big. It will become 2–3\% if that happens with more than one cofounder, and it will become 4-6\% if you also go more than a year before fundraising. That’s a lot of equity.
How much equity should I give a part time CTO?
It depends if they are Founders or Non Founders and it can be anywhere from 1-33 percent. Why the 33 percent, because if you are less than 3 people and can not survive w/o a technical/co founder/CTO then they are worth it. If you just need a CTO then its in the 1-4\% range.
How do you divide equity in a startup?
The founders should end up with about 50\% of the company, total. Each of the next five layers should end up with about 10\% of the company, split equally among everyone in the layer. Example: Two founders start the company.
Do I need a tech cofounder?
You need someone or people with programming skills, but you don’t need co-founders. In fact, many startups built by strong teams failed because of co-founder disagreements and misalignment of interests. Finding a technical co-founder doesn’t necessarily solve the “who’s going to build the product” problem.
How do you calculate the founder’s equity split?
Each element’s weight is then multiplied by the ranked level of the founder and added up to indicate the founder’s equity split. For example, founder 1 has a ranking of 10 for Ideas, meaning that he contributed the most to this. We multiply 10 by the weight of 7 to get 70 points. We repeat this process as shown below:
Should equequity be split equally?
Equity should be split equally because all the work is ahead of you. My advice for splitting equity is probably controversial, but it’s what we have done for all of my startups, and what we almost always recommend at YC: equal equity splits among co-founders. [1] These are the people you are going to war with.
What happens to a company after an equity split?
If questions pop up around the fairness of the equity split, and the founders are unable to resolve these issues, impasses and the inability to move forward can negatively impact the company. Resentments build, frustrations rise, and the team becomes dysfunctional.
Should co-founders work full time or part-time?
Full-time versus part-time: If one co-founder is quitting her job to dedicate herself full-time to the company and the other is working part-time, the part-time founder deserves less equity because she’s both taking on less risk and providing less value and time commitment to the company.