What is a fair equity share for a technical co-founder (CTO)
2 by marvel9292 | 0 comments on Hacker News.
Hi everyone, A few years ago I started a SAAS company with 2 other guys. Lately I'm doubting quite a lot if I'm not undervalued compared to them. We all invested money in the startup and the percentage invested determined the percentage in equity. Me: 20% (20k) Founder B: 40% (40k) Founder C: 40% (40k) I am the CTO / technical guy with full stack skills: DEVOPS (AWS, Docker, CI) Backend (Postgres, Python and Django) Frontend (Angular.js) Founder B is the CEO and doing the sales and support. Founder C is the product owner and also does support. Unfortunately we're not making revenue because of a pivot and I was not able to invest more money again. They were and because of their investments the equity is now like this: Me: 10% Founder B: 45% Founder C: 45% The company is my only stream of income and we pay ourselves €2000 net every month. They also run another company which they're making good money with and because of it they're: 1. Not financially dependent of this new startup 2. Able to invest again and again in this new startup The problem: - There's no equality at all with 10, 40, 40 - When they're investing my equity decreases - They're less afraid to work with other investors in the future because they both own 45%. They can easily miss some of it. For me that's a bit different. - It's likely that we're going to use equity in the future to get commitment from new important team members - I'm also investing a lot. With my skills I can easily earn 6k per month as employee and 10k+ as a freelancer - I'm very important because we're a tech startup My thoughts and doubts: - It's not very motivating to only have 10% with the change it will decrease more and more in the future - For the skills, responsibility and pressure I have I think 10% is undervalued and we should not only look at the amount of money invested. When I look on Y combinator, they also have many reasons to not only look at how much is invested. See: https://ift.tt/718s0Fm Concrete questions: - Are my doubts reasonable and is it reasonable to negotiate for a higher equity percentage? What would be fair? - Is it reasonable to have an agreement that my equity is not going any lower than 10% anymore? - Are there any other options you guys and ladies think of? Quite a long story, hopefully you've made it till here and can give me some advice ;-) Thanks!