Ask HN: How should I divide equity?
I’m working on a startup with a partner, and we’re struggling to figure out how to divide equity. We are very early stage and have not launched yet.
I am a software developer (technical cofounder), and my partner is handling the business side of things (non technical cofounder). We’re both working part time on this venture because we’re both still in college.
Normally, the advice is roughly 50/50 vested over 4 years. The complication is that after next August, I will be working at a company that disallows working on side-businesses. The job I am taking in August is with an established company for 120K/year before benefits. I’m nearly certain I will have to leave our startup because I’m not willing to risk my job (and the benefits of having a high paying job this early in life) for this venture.
I’ve got a fairly significant technical background (internships, lots of experience in open source outside of school), and I’ve already built out an MVP (NextJS app) that I have not signed away IP rights to. My nontechnical cofounder has drive and motivation, but he does not have any prior sales/marketing experience, and he does not have any industry connections we’re relying on. My non technical cofounder came up with the idea. He has also helped build a waitlist and gathered data about our target demographic. I do believe that if we had more time together, this venture would be successful.
My partner suggested that I take 3% fully vested once I leave in August. I think this is a low offer given that I have written an entire working app already. My partner offered this amount after seeking advice from VC advisors that are potential future investors (even though I don’t think we will need investment because this business is 100% bootstrappable). He made a second offer for a profit sharing agreement that terminates after I have earned $2K (also a bad offer imo).
I countered with 10% fully vested after August. This will be a minority stake, though, and after his initial low offers, I think I want to receive a mix of equity and guaranteed revenue sharing (not really keen on letting someone else profit off of my work without getting a kickback).
Given all of this information, how would you approach this situation? What kind of offers would you make? Should I just leave and take my IP with me?
I’ve struggled to find good advice. I am very appreciative of any help.