How much equity should I give to my new co-founder?

@halltc To process 2000-2500 unit articles per month. That’s our order volume per month. We have customer support, accounts, fulfillment, supply chain support and so on.. We are a profitable company and our business model is an integration of Manufacturing, Supply chain and IT.
And we are currently hiring 4-5 employees per month to support our growth. Plus we are a vertically integrated company, which requires us to handle the backend process to customer end process.
There are many moving components to the business model and multiple variables that needs to be delicately handled. So all these stages are labor centric and cannot be fully automated.
 
@gloria_ Labor intensive in regards to manual labor or data entry? Could AI ChatGPT enhance your customer onboarding processes and provide some automation? Something to think about it and reduce your need to hire so many employees and decrease your burn.
 
@gloria_ I don't fully know your business but it sounds like an outsourcing business to me from this whatever little info you've put out..

If this is sort of Infosys of software development, imo Infosys don't qualify as a startup or scalable business
 
@revena The issue isn’t of business operations and automation..
It’s just that when I started my startup initially, there weren’t eager technical cofounders to join in. The ones that joined weren’t full time..

So I ended up doing all this by myself with an in-house team of 2 devs, and built the startup to 45 employees and at least $33k MRR which is growing to $60K MRR very soon..
My realization is that bootstrapping is cool but slow and will eventually need VC funds in a year of two.

With this much traction, milestone, infrastructure and product built (we’ve reinvested over $100k on infrastructure and equipments from our revenue alone)..

Do I actually need a technical co-founder to get into great accelerator program? And if so is there any standard metrics to split the equity?
 
@gloria_ Interesting, where is the business located and what does your app do? This is significant MoM growth any VC will directly invest so I don’t get why you need a technical cofounder at this stage.
 
@agamemnonoftroy Coz most of the people I talk to have suggested I might need a technical co-founder to scale the business. And VC wouldn’t find me attractive enough to fund..
Watching YC contents or any startup funding related contents does insinuate that narrative.
Or you have to be some kind of Exceptional Super Star Founder to get in solo, which unfortunately doesn’t fit my description even remotely.
I do believe I am expectational in unique ways but belief isn’t an accurate yardstick as opposed to writing a code for mars rover or getting into Stanford at 13.

I am only here to evaluate my milestone and gauge for applicable and practical advices and methods to split the equity..
 
@agamemnonoftroy I got rejected few times before that’s why. But again back then I had 0 revenue and only an MVP.
Than I had 5000 users gained in 7 days time, but 0 revenue. But again I was in the top 10% but didn’t get an interview..

I have rejected investment proposal from local VCs.
However I will definitely need to move to a bigger space in a year time which is going to be super costly and will require a significant investment to build the infrastructure..
So 12 -18 months from now; I don’t want to be scrapping off to get a new space.
I have relocated 3 times to a bigger space in 10 months time and having to relocate in a cheap and unsavory space isn’t something I enjoy.
Esp when the landlords reside in the same building and are annoyed that our office is operating late at nights.
We’ve been asked to move out many times coz our late hours were causing inconveniences to our landlords..

Plus lifting and shifting heavy equipments and machineries is a costly affair and we loose money and productivity in that process.

And for that reason, the next time we relocate, we want to be in a good space.
 
@gloria_ Understood. I don’t personally believe you currently need a technical cofounder, in all cases did you find one? It is very tough to find the right person. It might be easier to employ a very good CTO. Out of interest Where is the business based and what does it do?
 
@agamemnonoftroy Our business is registered in the UK, but our 90% operations are run from Nepal.
The local VC’s here takes significant chunk for very little capital and hence my decision to register my startup in London, while opening a sub branch here..
My startup is an intersection of Manufacturing, Supply Chain and Technology currently centered around the fashion industry..

We run our own brand (25% - 35% net margin) while also allowing our users to submit their custom designs for a fee. (50% -60% net margin)

We produce and ship those designs to the original customer while also listing it in our app. The original customer earns 15% commission on sales. (20% - 30% net margin)

Plus our users can also upload their thrifts in our app, where we charge 10% on sales. (Potentially cover 15-20% of our operation cost)

We are building a complete ecosystem for fashion.
We are like YouTube for fashion creators but we are a vertically run company. We handle everything from 0 to 10 all in-house..
 
@ngav3 No we don’t do custom t-shirts..
We are in Fashion Space though..
Again not just an e-com.

Here’s what we do:
1. We run our own in-house brand, but we also allow our users to submit their own designs through our “COLLAB” program by selecting fabrics from our “Fabric Library” for a price similar to Zara. We produce and ship the design to the original user while also listing the same design in our app. The original customer earns 15% commission on sales..
  1. Our users are also allowed to upload their thrifts in our app and we charge them 10% commission on sales..(launching next week)
P.S: We’ve currently haulted our “Collab” program due to the fact that we don’t have the capacity to fulfill any additional orders. We infact got our 1st 5k users within 7 days with 0 marketing spend just coz of the “Collab”. Feature. We will relaunch the feature again in a month once we are ready to handle the traffic..

On a nutshell we are trying to build a complete fashion ecosystem here.
 
@gloria_ Why do you even want to go to YC? Look for the best, most helpful, kind and committed VC in your space and just grow your business that way. You are way ahead of many YC companies, people join YC to achieve what you’ve already done on your own.
 
@rusyngirl YC or any VC for that matter is irrelevant here.

I was only trying to explain the context as a solo founder and my prospect of getting funded by VCs or any accelerator programs as a solo founder..

I will eventually have to raise capital to scale and for that matter I will need to take any available routes at my nearest disposal.
So YC was just a past case scenario where I applied with an MVP & 0 revenue and got rejected twice. However the 2nd time I got an email that I was in the top 10%. I in-fact received 2 emails before being rejected. This time around I had a co-founder, an MVP, 5000 test users and “0” sales.

So I couldn’t decipher the exact factors that got me into top 10% the 2nd time!! Was it coz I had brought in a co-founder? Or was it some random stuff?

Hence now that I have traction, decent revenue and quantifiable results; would I be an attractive prospect as a solo founder to any accelerators or VCs?

If not is there any standard form of equity split laid out in such cases where a new co-founder finally joins when the startup has achieved PMF, revenue and growth???

I don’t have a proper and fair understanding of how much equity to give if a new co-founder comes onboard.
Coz the 2nd time when I got a technical co-founder on board, I already had 5k users, semi functional MVP and some traction which I did it solo.
The co-founder only joined the startup late during the application process with 35% equity to his name. We didn’t get an interview, and the potential co-founder continued his employment with his old company..

Now the scenario is lot different, and I don’t know if I should still go solo or take a chance with a new cofounder.
 
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