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I am preparing to launch a new start-up with the owners of my current company. It will be a separate company so equity needs to be determined. The idea for the start-up was mine and I am working with a developer to get it launched. BUT, they will provide all the capital and resources. What's a reasonable equity stake to request in this new venture?

thanks!

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Brtual answer: whatever you can get away with.

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That doesn't seem like a framework for creating a reasonable starting negotiating position that the other side will see as agree able. – John Bogrand Sep 17 '10 at 20:06
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I suggest a little self inventory of what your bringing to this startup. So I hear that you have the idea but lets rate that by itself as low (ideas are all over the place).

So look at what skills or resources are you are bringing to the group that are needed

  • Do you know specific people that are key to its success?
  • Do you know the market in a very special way that others don't understand?
  • Do you understand the requirements for the product well enough to create the revenue?

    So basiclly come up with an inventory of what your bringing to the table rate it as far as do they have an alternative to what your bringing and then understand that cash is king. Will you be compensated in other ways and what is the real upside to what your doing. Also rate these against the capital that is coming in to make the idea possible. Is it 1K, 10K, 25K, 100K etc to get an idea of what you are bringing compared to the resources at risk from the investors. The lower the capital invested the higher % you should ask for. Also related it to how else you will be getting compensated.

    With all of these pieces figured out you should be able to create a sound argument for the % you believe you should get.

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