I'm a tech guy looking to join a company as a co-founder. Quite often companies are in various stages.
For example for 2 different business offers, pre-seed/pre-series A: Lets say founder A, spends $X dollars and 1 year, pivots and comes up with a NEW AND IMPROVED business plan. But, compare this to founder B who spent $X/100 dollars and 1 month to produce a business plan.
From my perspective both business plans have merit. However, founder A will point out that a considerable amount of time and money have been put in the existing company, any new founders (who didn't invest at the start) should get a lesser share. In comparison to founder B, there is less investment in time and money, but more equity to offer!
Founder A offers 10%, while founder B offers 40%.
From a competitive point of view, founder B's offer is a bigger chance of something currently worth nothing. But the same can be said for Founder A's plan, something of nothing = nothing!
I'd much rather have 40% of something, rather than 10% of that something else. If you ask about potential money to be earned, well no one knows the future!
The core of my question is:
How do you respect previous investment (time/money) that didn't result in success in an equity offer? If you do respect it, isn't that believing in sunk cost?