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I have read the multiple threads about equity splits but I am getting mixed answers. Mainly between this thread which pointed me to this The Founders' Pie Calculator which states it is a rookie, first-year entrepreneurial mistake to split up the equity equal ways while this thread explicitly states otherwise. I understand that there is no perfect formula, but I'm just asking for everyone's opinion based on their experience.

Here's the situation which I'm going through: I am the CIO and Co-Founder of a web-based company. On board we have a CEO, CFO, COO, and a marketing person. The idea originated from the CEO and COO. Although the company wants to give me the 2nd highest equity right under the CEO, I'm just trying to figure out what that range should be. I wouldn't expect the marketing person to get that much equity but what would be a fair way to really split this up? I am the only technologically-savvy person and will be developing the site on my own. The only person who has financially put money into the company is the CEO.

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That's the nice thing about the internet - keep searching and you're bound to find someone who will post advice that matches your perspective.

I think the second post you reference is much more that 50/50 and move on - the core tenant is stated:

Fairness, and the perception of fairness, is much more valuable than owning a large stake.

Sometimes fair is 50/50. Other times its not. It's up to you to work though the differences and justify what is fair and just amongst peers that also are placing their bets on you as well.

Another tool to review would be the co-founders equity calculator - which can deal with more than simple division - but not so well with staggered start dates and cash in scenarios.

I would also suggest reading this post on equity for early employees - in addition to linking to a couple of good references from the VC side of the table, it details out a equity formula approach that mimics how VCs determine a pre-revenue startup valuation.

The main takeaway is that early employee equity is more art than science. What's considered reasonable by all in one organization may not fly in another.

Good luck.

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From what I've seen, having an open discussion around the Founder's Pie Calculator is a good test of a team. Everyone should fill it out and stick in their numbers, and then chat. If egos flare and people can't rationally discuss,

  1. What they bring to the table.
  2. What level of risk they're willing to bear.
  3. How replaceable they are.

...then the venture is doomed anyway.

Based on what you shared, your team seems too large for what looks like an early-stage (no prototype, no customers) venture. Are the "CFO," "COO," and "Marketing" guys really going to be busy and contributing from day 1?

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