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Ask HN: Co-Founder split
7 points by cuchoperl on Nov 10, 2010 | hide | past | favorite | 4 comments
Hello.

I have been a fan of HN for a while and this is my first post.

I am the only founder of my startup and I have been working on it in my spare time (20-30h / week) since May. I work full time in an angel investor network.

I decided to invite a co-founder because:

1. It's has been very lonely so far. I need somebody to share ideas, brainstorm, cry/laugh together, cheer when things go wrong, etc.

2. I am lacking some skills that I need to run the company. For example, I do a little bit of programming but not enough.

3. My time is limited. I would like to keep working in the angel investor network as long as I can (it's fun and I am meeting interesting people), but I look forward to work full time in my startup.

I have been working for a couple of months with a freelance developer. He is young, smart and has more skills than programming. We work together well and I enjoy working with him.

He has told me he would like to join the startup. I want to invite him as a co-founder.

He is still in the university (finishing mid 2012) and he can work in the startup for 30h/week.

What I want to do is this: keep my current job and pay him enough to cover his expenses (25% of my salary) so I can have him for 30h/week. What I will pay him is half of his market (odesk) price. I will work 20h/week.

So I will give him a share of the company because I want him to be a co-founder, not an employee.

I got the idea and I have spent $5,000 for developing a demo, legal fees, trademark registration etc. I also have spent around 500 hours of work myself.

How much of the company should I give him* so he can feel he is a co-founder (not an employee) and taking into account I am the one taking most of the risks.

Thanks for your help. Sorry for the poor English.

*We will do a vesting of the shares, of course.



My first reaction to this plan is 'this is not a cofounder.' While the deal you describe might work fine, you're not setting things up for an equal partnership. I would suggest if you move ahead with this plan, you talk about and consider the relationship to be 'key technology hire,' and carve out 15% or so for him, on a short vest, PLUS make up the difference in his market rate with stock, vesting as he earns it.

Choose a low valuation so that you can be friendly later in life if this is successful.

I personally believe in reverse-vests for a super early hire like this: give him the chunk up front, and execute a (pre-agreed-on) clawback if it doesn't work out in the timeframe you guys agree on.

Anyway, I don't think it sounds like you have the attitude needed about this person to bring him on as a full co-founder. If you call it that, and it's not a co-founder situation (as in, you both bring an equal say to the table and are roughly equivalent in value to the corporation), one of you is going to be unhappy.

My 2c.


For founders, start-ups are a Binary thing. Either they fail or they succeed. The difference between a 60/40 or 70/30 split is not that important when the pie is 0 or when the pie is 20M. It's nothing or it's enough, so don't over complicate it and just make an offer that makes sense to you.


To me it sounds like you are looking to hire an employee who you plan to give some shares to.

Honestly I wouldn't bring on a co-founder unless the risk was equal. His payment for now should be the Shares that he will get for being the Co-Founder until the business starts bringing in Cash.


But what do you do when that person needs to pay bills, food, etc? Im will pay him very little ($400/mo), just enough to live. If he hasn't got money to pay the bills, he will have to spend time doing consulting work, and that's less money for the startup. I'm buying his time at the cheapest price possible.




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