Imagine the following scenario:
1 founder and self proclaimed CEO , created an idea for a new website internet services, and started developing it. The core of the system is done, he decides that one co-founder is needed and invited an friend, another very skilled developer, to be the CTO, retaining 30% of the company.
Both are also starting the initial costs, which are pretty much, clouding computing services to host the solution and books about subjects that help them make the it happen.
Both have their regular 8 hours job, and invest their time working on the startup during nights and weekends, they are doing good so far!
In their FIRST!!! attempt to search investors, an Angel Investor group, became very interested in the solution claiming 40% of the company shares by investing 300,000 US dollars.
Both founders are very satisfied, but before accepting, they face their initial argument.:
Founder wants to quit his job to work full time in the project for 1 year in order to accomplish the Angels agreed goals which is pretty much start creating a module to start making revenue. Founder also expects the co-founder to quit his job to do the same, which disagrees.
Co-Founder suggests to keep their jobs, and study to possibility of hiring developers to work remotely(from their homes, since there is no office) in order to achieve the Angel goals to justify the initial investment.
Most of the current development time, Founder is more into the project then Co-founder (spending more time of development) . Founder start believing Co-founder doesn't have the same level of commitment and don't deserve the 30% of shares...
As you see, there are many dilemmas in the story above... the questions that come up are: How do we define how much shares a co-founder should have? How to deal with Co-founder that doesn't have same level of commitment? How to re-negociate slipping shares after first offer of investment?