We are planning for a software startup and following is our setup.
- There are 4 people who came up with idea. But these people can NOT code and build a product.
- These 4 people are also going to invest in idea from day zero for next 1 year for maintaining office expenses, salary to CEO, developers in next point(3, 4) etc.
- Out of these 4 investors, one of them will also work full time as CEO and withdraw a salary which will also be 60% less then his market salary.
- There are 2 developers who are single handedly going to build the product. Developers will get salary which will be 25- 35% less then their current market value.
- 4 investors also believe they have connections and understand the market which can ultimately make the product success.
- We will hire employees in future and would like them to stay longer term like a UI/UX developer, sales team etc.
People who came up with idea and are also investing, are not willing to make developers their shareholders, except through vesting. Is this logical and commonly followed practice or should developers also be part of core team with founders equity from day zero?
What should be the suggested way of equity division from your side?