WE'VE MOVED!

We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
Options

what percentage of ownership is fair?

bcamp1973bcamp1973 subscriber Posts: 2
edited August 2008 in Business Planning
a coworker has recently brought me on board for his startup. It`s an excellent idea and I think it may end up being *very* profitable. so far there are four of us. i`m the information architect so i`m responsible for the UI and usability of the application (web application). we all work together to vet the basics of the application and what it`s features and requirements are etc. we`re working on patents, business plan etc so we can go for private funding. 
Long story short, we`re just about to start discussing the details of stocks and ownership etc. How in the world do I determine what my ownership in the company should be? The basic idea behind the company is my coworkers concept, but i (and others) have all contributed considerably to it`s development. I have no reason to think i`m going to be taken advantage of, but i want to be prepared to discuss it intelligently. Any suggestions? Any good references that you can recommend? 
· Share on FacebookShare on Twitter Share on Google+

Comments

  • Options
    robertjrobertj subscriber Posts: 0 Member
    I like to look at the issue in three parts:

    Compensation - for work accomplished
    Control
    Opportunity - for future return.
    For compensation, I would look for "equal" value if you are not receiving (or will not be receiving a salary for a long period of time).
    With four of you involved, I recommend some professional advice.
    Send me a PM if you want to discuss specifics.
    · Share on FacebookShare on Twitter Share on Google+
  • Options
    DeenaEsqDeenaEsq subscriber Posts: 0
    Please, please, please make sure that you and your "partner" sit down and put everything in writing now.  Don`t wait until there`s a problem....
     
    Just my $.02...
     
    Deena
    _______________________________________________________________
     
    Any opinions are offered without knowledge of the specific law of your jurisdiction and with only the limited information provided in your post.  No advice given here should be reasonably relied upon by you or any third party without consulting an attorney who is aware of all of the facts and law surrounding your situation.  Any advice given here is not intended to create an attorney-client relationship in any way.
    · Share on FacebookShare on Twitter Share on Google+
  • Options
    bcamp1973bcamp1973 subscriber Posts: 2
    Excellent advice, thanks to all of you. One "partner" has already been tasked with finding a lawyer and setting up the details of the business structure/shares etc. So we`re definitely doing this "right". However, I wanted to do a little research on the side for my sake so I would know what`s really "fair". I thought there might be some standard equations or other such "templated" approaches to this, but maybe not?
    · Share on FacebookShare on Twitter Share on Google+
  • Options
    robertjrobertj subscriber Posts: 0 Member
    ideaguy,
    I can`t give you a definitive suggestion on percentages without more information - starting with the basic structure and what (if any) compensation you will receive for "overseeing" the project.
    Send me a PM if you want to discuss specifics.
     
    · Share on FacebookShare on Twitter Share on Google+
  • Options
    infiniqueinfinique subscriber Posts: 0 Member
    Try to explore that of a listed firm. It's probably the best structure.
    · Share on FacebookShare on Twitter Share on Google+
Sign In or Register to comment.