Joining a 1 year old startup as a late co-founder, what should my equity be?

[brucee]

@biblequest It could be ok - Really depends on the revenue. Some revenue could be $100 or $500k. Tripling $100 is not impressive. So you need to factor in that part of the equation in relation to the value of your equity.

What's the runway? What do you believe you're worth now? Could you do better somewhere else? What do you think the company would sell for in the future? What will your efforts mean to the overall and long term value of the company, how valuable are you really? What does your 15% equal in that world - remember you'll all be diluted as you raise capital. If the numbers work for you then you should be happy, if not you should really think about what it needs to be.

 

[johnmartin]

@biblequest

Hence they plan to expand with 2 additional co-founders to help accelerate the growth.

This tells me a few things:

1. They don't value their startup.
2. Control/leadership conflicts are likely to happen.
3. Most investors won't touch this with a barge pole.
   
   Why are you valuing the equity enough to work for it, if they don't seem to value it? What is your growth/exit strategy if investors won't touch this?

 

[biblequest]

@johnmartin Thanks, didn't see it this way and hopefully many future partners can learn from this perception too

 

[hephzibah1021]

@biblequest Depends on what you bring to the table

 

[mutual_oasis]

@biblequest Do you mind if I just confirm if this is definitely ownership and not profit share? Sorry if the question seems daft, but makes a big difference & is a trick used by many owners

 

[biblequest]

@mutual_oasis Its ownership percentage n not profit. Do you know how this will be compensated? Profit share is simple as its just whatever the profit they make they have to give you a part of it. But how does one get paid in the form of ownership?

 

[mutual_oasis]

@biblequest Difference from profit share is if you sell the business you’ll actually take 15% value

 

[mutual_oasis]

@biblequest You’ll get 15 % of dividends taken out of the business. How often this happens is down to owners discretion but yeah 15% is a good offer

 

[darcia]

@biblequest I would say this is not good. Simply put you need to earn your shares. So based on a time invested you would get more shares. So lets say your max was 35% and you start with 1% and the more time you invest the more shares. For example what if you worked for 3 months and quit? You should not get a full 35% for only 3 months. Another factor would be "what are you bringing to the table?".

 

[biblequest]

@darcia Yup ur right i included additional details in the edit section concerning this

 

[sarah1972]

@biblequest 15% seems reasonable for a year's delay and equal work.

 

[ness128]

@biblequest Are you getting a paycheck? If so, is it at market value or below?

 

[biblequest]

@ness128 Below market rate

 

[rasmus2]

@biblequest That does sound very fair to me. I'm assuming you won't be getting any salary?

 

[biblequest]

@rasmus2 Actually we will have almost identical salary but its nothing much (minimum wage)