McStartup

Susie wrote:

I came across your website and found it really interesting. Am working for a start up right now and wondered whether you might be able to help...

8 months ago my boyfriend came up with an idea for a start up. For the first three months I worked on it part time with him along with another guy who was also part time. In January we both became full time and my boyfriend brought on another woman who was initially part time, then quit her job to become full time in February. My boyfriend made her CEO and Co-founder, and himself Co-founder. The other guy and myself are not co-founders but have been working on this full time since January and put a lot into the project.

We are about to close funding and time has come to split up equity. At the moment my boyfriend and the CEO as co-founders are splitting Founders Stock 50/50 and the other guy and myself will hopefully get some proportion of their stock. I have no idea what, as a non-found, but on the original team, unpaid and full time since conception, should be pushing for % wise.

I believe the official term for this is "a royal mess".  It's really imperative that you have an agreement on who is receiving what equity up-front, because it becomes awkward to have those conversations later.

There is no right answer to this question.  It depends on how many hours people are putting in, if people are putting up cash, what their work is worth on the open marketing, who is doing what, etc, etc, etc.

The one thing I can tell you is this:  However you split the equity, you need to set this up as either restricted stock or stock options.  In this way, if someone leaves, or doesn't work out and you have to part ways, they won't walk off with a huge piece of the company.

Take a look at this past article for some more information -- and there are several more here on the site (look at past articles and search for "founders" or "equity").  How to Structure Equity for the Founders

Sorry I couldnt' be of more help, but at least you can start with that article.

Jeff