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We are two 50/50 founders of an enterprise SaaS company. both cofounders are tech people with a good grasp of business knowledge.

Mainly, one of our cofounders brought most of our clients and handled important alliances, the other have spent their time building our product and maintaining 24/7 our infrastructure.

Nonetheless, the business cofounder asked for the CEO role a salary compensation 112.5% higher and commission upon their sales.

is it fair?

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Remuneration is always subjective / open for interpretation. More importantly, what do you think? – jimg Dec 27 '12 at 22:32
updated. thank you :) – SDReyes Dec 28 '12 at 1:21

2 Answers

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Fairness is a subjective term. There can be no absolute well-defined answer.

However, borrowing from the labour-wage theory, there are two ways you can look at it.

The Production Value

Did the work that the sales-oriented co-founder do or does require more effort than the coding founder? Did/does it involve more effort, risk, or sacrafices?

Frequently for full-time developers it is much safer to just code your way into a startup. If it doesn't pan out, you have a great resume bullet point. For the sales-guy-developer, it just means that they missed out on learning a new technology and honing their skills and now have nothing to say for it.

On the flip side, maybe the idea was so great and such an easy sell that there was barely any work in it?

The Market Value

How easily could the sales-oriented co-founder be swapped out for someone else? Were the sales leads there due to their personal connections? Which one of the co-founders would be more successful if they started the business with someone else?

The value of something is not just a measure of how much effort it took to produce, but is also a measure of the demand for it. People with unique circumstances can do very little, but the impact of their actions can be tremendous.

The 50/50

This gives you veto power over everything. If one co-founder is ready to say "you are now more important person in the company than I am" then that's fine, but by no means do they ever have to say it.

Hopefully this answer will help you distill whether the difference in renumeration is fair.

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If you ever go for outside funding. VC's will want to see one co-founder have a higher percentage. The reason being is when it comes down to it who makes the final decision.

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