If you give a founder (or early employee) more than they're going to be worth in the long term, you'll feel increasingly motivated to fire them and recover their un-vested stock. If you give them too little, they become increasingly motivated to quit and start something they can own.
Totally. I actually felt like he didn't contribute as much (coding-wise), and felt that 50/50 was a bit generous for him, but then again a business is not just coding and he was into the "CEO" role, and I was fine with that. I was at the extreme of the second scenario: no motivation to do this at all. What amazes me is his proposition; how is he going to get anyone else doing this job, with no funding at all to pay a salary?
One or other of you was going to end up unhappy, in a company-destroying sort of way. I would have quit also and would make sure to sort the ownership question out earlier next time.
This was my key takeaway. Free GOOD learned-the-hard-way advice for ambitious would-be startupers: before even starting to discuss an idea, agree on how are you going to work on it and split the equity. You might be amazed by some people's concept of "partnership".
Somewhat tangentially, people also tend to over-value the ownership that their "idea" should entitle them to.
The initial idea was his, but we developed it much further together. On the implementation side there also had to be tons of decisions on how to move forward, and here I believe I was contributing way more to make it happen. Overall I felt it was a fair deal.
Sounds like you're both putting in same resources and taking same risks. You didn't mention opportunity cost.
We are mostly on the same terms. We have both been working our jobs with almost the same salaries, so we were taking very similar risks here and "losing" about the same in opportunity costs.
If it's his idea, and he can get someone at his term (0% ownership, percent of sales), then it makes no sense for him to take you on a 50%.
That is what puzzles me the most, because I think he can't. We both have no track record and no capital to invest, nor have been funded before, and have very few contacts. And I don't see anyone working on a business with no revenue without being given any equity at all; even with a nice salary, the job could be gone at any time.
If your co-founder put in significant work before you started, then you should expect less than 50/50 ownership.
That was not the case.
Again, thanks for your comments. And, again, the lesson I learned: discuss with your would-be partner(s) how you'll split the equity, work and what each is willing to contribute before even talking about the ideas. Especially before starting to write code.
If you give a founder (or early employee) more than they're going to be worth in the long term, you'll feel increasingly motivated to fire them and recover their un-vested stock. If you give them too little, they become increasingly motivated to quit and start something they can own.
Totally. I actually felt like he didn't contribute as much (coding-wise), and felt that 50/50 was a bit generous for him, but then again a business is not just coding and he was into the "CEO" role, and I was fine with that. I was at the extreme of the second scenario: no motivation to do this at all. What amazes me is his proposition; how is he going to get anyone else doing this job, with no funding at all to pay a salary?
One or other of you was going to end up unhappy, in a company-destroying sort of way. I would have quit also and would make sure to sort the ownership question out earlier next time.
This was my key takeaway. Free GOOD learned-the-hard-way advice for ambitious would-be startupers: before even starting to discuss an idea, agree on how are you going to work on it and split the equity. You might be amazed by some people's concept of "partnership".
Somewhat tangentially, people also tend to over-value the ownership that their "idea" should entitle them to.
The initial idea was his, but we developed it much further together. On the implementation side there also had to be tons of decisions on how to move forward, and here I believe I was contributing way more to make it happen. Overall I felt it was a fair deal.
Sounds like you're both putting in same resources and taking same risks. You didn't mention opportunity cost.
We are mostly on the same terms. We have both been working our jobs with almost the same salaries, so we were taking very similar risks here and "losing" about the same in opportunity costs.
If it's his idea, and he can get someone at his term (0% ownership, percent of sales), then it makes no sense for him to take you on a 50%.
That is what puzzles me the most, because I think he can't. We both have no track record and no capital to invest, nor have been funded before, and have very few contacts. And I don't see anyone working on a business with no revenue without being given any equity at all; even with a nice salary, the job could be gone at any time.
If your co-founder put in significant work before you started, then you should expect less than 50/50 ownership.
That was not the case.
Again, thanks for your comments. And, again, the lesson I learned: discuss with your would-be partner(s) how you'll split the equity, work and what each is willing to contribute before even talking about the ideas. Especially before starting to write code.