Ask HN: How much equity should we split?
My friend came up with an idea for an app, and he would like 40-50%.
All he is doing for this idea is coming up with the original idea. I make the idea (an app), design, and updates/changes.
What do you think is a fair equity split?
Comments
I tend to think not.
I think a better way to approach this is to think about the evolution of the equity split over time - i.e. how do the two of your "earn" the equity?
It might make sense now if he has the idea and you bring the skills that today the company is split 20% him, 10% you, 70% held aside for investment and staff.
If after six months you're still both working on the project then you've earned a lot of equity with your work, and he's earned some as well (assuming he's working in a sales / ops role). After 6 months it becomes 30% him, 30% you, 40% others.
After another year it's 40% each (or similar)... etc until you start taking funding and giving equity to staff.
0/100 or incorporate and make him responsible for selling and promoting the idea and app and doing finances. Then 50/50 with vesting for everyone. Track hours worked with harvest for both of you for vesting purposes and have a minimum each must meet monthly.