Tell me more ×
Answers OnStartups is a question and answer site for entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
up vote 2 down vote favorite

I am working on my startup. I am working on part-time and using all my spare time to work on it ( Thanks to Dharmesh. I watched your one of the video in which you mentioned that you still code till 2-3 in morning most of the day. That made me rethink about my dedication..) .

I have few friends who can help me in this but I am concern about how to split equity? I don't have problem in equal split but I am willing to go full-time as soon as possible while friends are not going to be full-time.

Any advise?

share|improve this question

2 Answers

up vote 3 down vote

@WebThinker, check out this website you may find some helpful advice here: StartupCompanyLawyer. This guys blog is all about incorporating, vesting, equity sharing, etc. I havent looked to deeply, but im pretty sure you willl be able to find some quality advice here about how to divide up a partnership in a legal and fair way.

share|improve this answer
up vote 2 down vote

If the plan is for your friends to eventually join full time, one option is to split the ownership evenly, but write up an agreement that pays you more of the profits if you're working more.

For example, if you work 40 hours/week and you have a partner working 20 hours/week who may switch to full time eventually, you could split the equity evenly (or close to evenly) but agree that you will be paid 66% of the profits. That way you split the profits in a way that is fair based on the hours worked, but your partner can transition to full-time without renegotiating the equity structure.

The obvious risk is that your partner might not ever do any work and he or she will own part of a company that they didn't help build, but if you're concerned about that, maybe you shouldn't be moving forward with the partnership at all.

share|improve this answer
+1 for evenly split and then make up for disparity of work with salaries or other methods. – TimJ♦ Jan 24 '10 at 1:43

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.