[Note: I also posted this on HN, posting it here to get some more feedback, if it's a duplicate for you, please excuse.]
I am the sole founder of a year old software start-up that is modestly profitable. At this stage I need another technical person to help me develop the product further. I want to hire a top notch engineer, and am willing to pay a market salary. I recently pitched my start-up to a grad school classmate who is currently working at a major tech company in the Seattle area, and he seemed very interested. This guy is one of the best engineers I know, and if he joined, it would be a huge help to me, both from the point of view of sharing the technical work, and just the emotional burdens of start-up life. I have been looking for a kick-ass 2nd employee for several months, and this is the first one I have found who is interested in my start-up. The problem is that he wants to join as a co-founder instead of as an employee.
However, I feel that I am the one who took all the real risk in taking the start-up from scratch to where it is today. I don't want to give up substantial equity in my start-up to another person!! I am willing to pay him what he currently earns, plus 5-10% equity in the start-up. But I have a feeling this won't be acceptable to him.
If I am not able to hire my friend, I don't know when I will find another equally talented guy. So I am in a bit of a dilemma. I would like to get some advice on this from fellow hackers. If someone else has been in this situation from either side of the equation, and he can share his own experience that would be very helpful in making up my mind. Thanks.