How much equity a technical cofounder should get
I assume both cofounders will be diluted equally as more employees and investors get involved.
Finally, I assume this chart may be a little surprising to non-technical cofounders. Why should a technical cofounder get so much of the company? Especially a company based on your vision. Basically, it’s because ideas aren’t worth much. Execution is what matters, and in most web startups that falls on the technical founder. Software developers are a hot commodity right now, and many of them know it, so they’re on the lookout for really stellar business people to partner with, not some run-of-the-mill, me-too idea having, 10k foot synergizer without any concrete sales prospects, marketing ability, or product experience. Sorry for the rant, but in all seriousness, I’ve seen too many good non-technical founders delay building a product for months because they’re too stingy with equity.
In summary:
- Technical cofounder starts with 50% if nothing is built
- If there is a prototype (not just wireframes), substract 10%
- if it has paying customers, substract an additional 10%
- OR if it has over 10K users, substract an additional -5%
- if non-technical cofounder has significant connections or experience, -10%
- if non-technical cofounder has raised VC before, -10%
- if non-technical cofounder has had a successful exit before, -10%
- if non-technical co-founder is putting in money (after hiring CTO), substract 5% for every 10K in investment