Equity stake in a new web startup

johnberger99johnberger99 Posts: 1subscriber
edited June 2008 in Watercooler Talk
I have recently been approached by a friend who has an idea for a great web startup. He already invested  personal $ and investor seed $ into the idea and has developed a alpha of the system. He approached me and asked me if I would be interested in equity in the company. This would mean, I would be the operating officer of the company. It would also mean that for the next 6 months I would have to dedicate 90% of my time to this without salary, but after we get funding the company would give me the salary. (although it is a risk of course of not getting the funding). My roles would be the help him build the company and help get series A funding for the company. My question is how much equity stake should I be asking for? Would I be considered a "Co-founder"?
johnberger996/10/2008 7:55 PM


  • eGlobalDepoteGlobalDepot Posts: 4subscriber
    If the project has not started yet, the I would say that you would be a co-founder.
    For how much of a percentage of the company you should get, I think it depends on how much he has invested and how much he is asking you to invest. Also, if you are putting as much time in this as he/she is, then I would strongly suggest  a near 50/50 split. Nothing less than 40/60. Also remember that you may need to give some shares away in the future for other parters or partnering with companies.
  • johnberger99johnberger99 Posts: 1subscriber
    Thank you for your thoughts.
    Here is additional details in the situation:
    I was the original developer on the project. He paid me well. Now he asked me to join the company and lead all the operations. There really is not any company yet, except a basic site built which is not live.
    His investors (and him) have already put up close to 300k and now he is looking for much more funding, this is one of the reasons why he wants me to get involved so I would help him build the operations of the company. To my understanding, he already has given away about 10% of the company to his investors. Thereby 90% is only left.
    My involvement would be 90% of my time until we get funding (and then obviously more). I would NOT be required to put up any $, only my time (which I guess is giving away my opportunity cost).
    With the above new information, what would be a fair percentage I should ask for? Will I still be considered a co-founder? I am really more interested in what percentage I should ask for to be fair.
    Thank you so much for your assistance.
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