I commented below, but personally every time someone comes to me with an idea I ask for 75% equity. Usually people scoff and walk away, but sometimes people are willing to negotiate.
To me it's always amazing how little equity some technical cofounders obtain. Ideas, like talk, is pretty cheap. Coding for years is pretty damn expensive.
Maybe I'm being naive, but there can be something else that the non-technical founder brings that is equally valuable to the tech stuff: paying customers. If they have actual customers that are ready to pay, then the deal may be worth it even for less than equal share of equity. Another is cash investment (not relationships with investors, real cash of their own that they are willing to invest).
I think most of these non-technical founders just have a fantasy about a product idea and it really is worthless. But if they have a good network of contacts and people ringing their phone for whatever they want you to build then that is some value.
If these idea people are so sure of their ideas, they can finance development using freelancers and they don't need a technical cofounder. If technical cofounder is just doublespeak for programmer willing to work for free + equity, only someone very naive will take it.
If you think that you realistically would require more than 50% of the equity to make it worth your time then you are better off politely declining and walking away.
Eh, it's the start of a negotiation. It "gets the mule's attention", and if they were thinking of giving you single digits of equity as I gather is not uncommon you've saved yourself time.
It also demands respect. They may not give it to you, but if something actually happens you'll be starting on the right foot, and the author claims this does not turn everyone who approaches him off.
It also gets the big issues right out there: how much is an idea and anything else they're bringing to the table worth vs. how much is the technical effort to make it live.
My point was that if you feel like your value as a technical person is worth more than the business person who has approached you (>50%) then you shouldn't bother. Between their experience, their idea, their connections, their money, etc. they should at least equal your value or you are in trouble regardless of how the equity breaks down. Negotiations are a different topic.
Comments
I commented below, but personally every time someone comes to me with an idea I ask for 75% equity. Usually people scoff and walk away, but sometimes people are willing to negotiate.
To me it's always amazing how little equity some technical cofounders obtain. Ideas, like talk, is pretty cheap. Coding for years is pretty damn expensive.
Maybe I'm being naive, but there can be something else that the non-technical founder brings that is equally valuable to the tech stuff: paying customers. If they have actual customers that are ready to pay, then the deal may be worth it even for less than equal share of equity. Another is cash investment (not relationships with investors, real cash of their own that they are willing to invest).
I think most of these non-technical founders just have a fantasy about a product idea and it really is worthless. But if they have a good network of contacts and people ringing their phone for whatever they want you to build then that is some value.
If these idea people are so sure of their ideas, they can finance development using freelancers and they don't need a technical cofounder. If technical cofounder is just doublespeak for programmer willing to work for free + equity, only someone very naive will take it.
Yes, people with money or people who already sold their (non-existing) product are indeed a good match and as scarce as good co-founders.
If you think that you realistically would require more than 50% of the equity to make it worth your time then you are better off politely declining and walking away.
Eh, it's the start of a negotiation. It "gets the mule's attention", and if they were thinking of giving you single digits of equity as I gather is not uncommon you've saved yourself time.
It also demands respect. They may not give it to you, but if something actually happens you'll be starting on the right foot, and the author claims this does not turn everyone who approaches him off.
It also gets the big issues right out there: how much is an idea and anything else they're bringing to the table worth vs. how much is the technical effort to make it live.
My point was that if you feel like your value as a technical person is worth more than the business person who has approached you (>50%) then you shouldn't bother. Between their experience, their idea, their connections, their money, etc. they should at least equal your value or you are in trouble regardless of how the equity breaks down. Negotiations are a different topic.
The negotiation only started when one party said "no".