Ask HN: Solo founder and MVP. New co-founder equity split?

I am a solo founder looking to bring on a co-founder. My original idea came to me over a year ago and I've worked on it evening and weekends. Four months ago, I left my job to work on my startup full-time.

I'm in my early 30's and my background is in investments and software. After college, I was a software engineer for two years before moving into asset management in a front office role. My product is built on the domain knowledge I gain in this area. It's B2B SaaS with target ~$15k-$100k p.a. revenue per customer. I've finished my MVP and am about to go full tilt into sales mode.

I would love to bring on someone to do sales. I'm in early stage discussions with a potential co-founder who is a friend and someone I have worked with. He's in his late 20's and recently completed an MBA at a top school. His background is in business strategy and analytics (sales focused). He hesitates when it comes to sales because he does not see himself as a sales person. Having said that I think he could do it and his role would evolve over time away from direct sales into more of a management role.

I feel like he would be a good fit because we get on well, he's smart and has decent experience. He is interested in startups and told me he wants to jump in with both feet. He doesn't want to make a rash decision so is holding back a bit.

His initial thoughts are he would work one day a week + weekends (his work situation is flexible) and eventually go full-time. I would love to have him full-time. He has a one month notice period on his contract.

Equity vesting would start once he is full-time over a 4 year period.

If he starts full-time in one-month, how much equity could I give him?

If he continues to keep his full-time job and goes full-time with me in X months, how could I think about the equity split?

“He hesitates when it comes to sales because he does not see himself as a sales person.”

isnt this a warning sign to you? at such an early stage you simply dont want just a “strategy” person who doesnt want to get his hands dirty

He is not a cofounder, he is (potentially) employee #1.

Cofounders don't get brought on to do sales. Employees do.

Treat him like a good salesman- give all kinds of incentive payments (commissions, bonuses) contingent on sales performance, but be very shy with the equity. Plan on firing him as a default unless he exceeds expectations quickly.

Equity corresponds to risk and skin in the game, and it sounds like he has contributed (and will contribute) very little to either.

Bonuses are paying him for what he accomplishes, equity is paying him for what you have accomplished. If he's any good, he'll make more from bonuses than even a 50/50 equity split. If he's not any good, then equity will be far more important to him, locking it in before performance is known.

And having just reread your comment, a salesman who doesn't want to do sales but wants to do management? You need to interview more sales candidates. HUGE red flag.

Have a beer with this guy and have a good time, but don't bring him on. The world is full of salespeople who can't sell and can't do anything else either. They get by through others' hope triumphing over experience.

Say, while you're giving away your equity for free, can I be your cofounder too?

> He hesitates when it comes to sales because he does not see himself as a sales person. Having said that I think he could do it and his role would evolve over time away from direct sales into more of a management role.

I've made this mistake before. Just because that person is super smart, doesn't mean he/she can pull of what you want from the person. To find out, you MUST try working with the person for a bit.

What you need right now as you say is a sales role. Then you need to find a sales guy. You can always bring in your friend later on when you need a "management role".

If you really want to try working with him, one way to try this out is to NOT bring him in as co-founder but bring him in as an employee and pay him based on commission. That's how sales people mostly make money anyway.

Then after a while if you think he really is someone you are looking for, then you can "downgrade" his salary and propose equity instead.

Which book did you recommend? Maybe others can make suggestions as well.