equity for engineer #1

gtfj75

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.

BizOptimizer

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

gtfj75

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.