equity for engineer #1

gtfj75gtfj75 subscriber Posts: 1
What would be a reasonable percentage of equity for engineer #1 in the following situation:
- 5 month old startup - 1 founder
- founder financing everything: wages, office rent, equipment, patents, lawyer fees etc... also doing all the marketing and business work.
- seed round not done yet
- 2 consultants working few hours per week.
- engineer #1 full time contributing to 80% of the technical work and paid 50% market rate.

Comments

  • BizOptimizerBizOptimizer subscriber Posts: 1
    The answer is whatever the market will bear.  But in reality, if everyone agrees to the 50% market rate - the company is worth X, there are Y shares outstanding - shares are worth Z.  So so shares are acquired at a price of Z using the 50% funds.  Keeps it simple.
     
    It would be a small percent of a big company - or a large % of small company.  Percentage is relative and therefore not of much value here.  Better to go with the actual values - then there is no arguement.
     
    Good luck,
    ed
  • gtfj75gtfj75 subscriber Posts: 1

    The answer is whatever the market will bear.  But in reality, if everyone agrees to the 50% market rate - the company is worth X, there are Y shares outstanding - shares are worth Z.  So so shares are acquired at a price of Z using the 50% funds.  Keeps it simple. It would be a small percent of a big company - or a large % of small company.  Percentage is relative and therefore not of much value here.  Better to go with the actual values - then there is no arguement. Good luck,ed

    what kind of answer is that ? do not reply if you don`t know how to contribute. Thanks.
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