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This question is very similar to this one: Revenue Split - I am doing 100% of the programming work, he's the idea man

The difference however is that I'm typically the idea guy and will also be sharing the development work with my partner. Further to that, in addition to development, I typically take on roles and responsibilities that are more business related.

I quickly used Alain Raynaud's equity calculator and came to an 80/20 split. Surprisingly, it was what I had in mind but it doesn't seem all that fair.

What complicates matters somewhat is that my partner may come with his own ideas that could enhance the product. However, at present, it is me with the ideas and will be providing most of the direction.

I would appreciate any perspectives and suggestions people have to share.

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Nice calculator! I didn't know it ever existed – user3997 Jul 27 '11 at 10:16
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John, one way to use my calculator is that both co-founders try to fill it out separately. You'd be surprised, usually you get very different results. Why? Because each person sees the other's contributions differently. Try that first, without telling your partner that you got 80/20. – Alain Raynaud Jul 28 '11 at 18:40
I was thinking of doing just that, Alain. I thought it would be an interesting exercise. I'll definitely do it now. Thanks for getting back to me! – John Jul 31 '11 at 3:15

2 Answers

up vote 2 down vote

As you mentioned, you have already used "equity calculator" and you say 80/20 seems unfair. Unfair to the guy who is getting 20 or 80? If you feel it is unfair to you by giving you only 80, then you need to answer yourself whether you need a partner or an employee. You are free to give more than 20 to your partner anyway.

You also feel that it is you today who is driving the idea and development, however later it could be your partner who has ideas and you guys work on those ideas. That's the whole idea of partnership. You both have to drive the business. It can not rely on just one person. Joel has already mentioned the rules of partnership. If you think your partner is equally capable as you are, then feel free to give him more than 20.

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up vote 0 down vote

if you feel it is unfair, make it fair. life is unfair dude...don't you think so? make it fair for you and your partner. good luck

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