Ask HN: How much equity to accept as the sole tech co-founder in this case? • Hacker News Board

Re: Ask HN: How much equity to accept as the sole tech co-founder in this case?

#11

Post by buzzthro » Fri, Feb 11, 2022, 4:37 PM UTC

PragmaticPulp wrote: post #5

> They are about to close on their seed funding though and I'll be joining after right after that. Hold on - They are raising funding right now, but planning on bringing you in after fundraising? If you're truly a co-founder, why aren't they bringing you in now? I'd be concerned that they're using you to secure fundraising, but they're getting the best of both worlds by waiting until after funding to give you less eq…

> Hold on - They are raising funding right now, but planning on bringing you in after fundraising?

That's right.

> Do you know how much equity they have? How big is this "founders pool" of equity?

They're saving approximately 7% for ESOP and proposing I think I agree with what you're saying. It does feel like a regular post-funding early hire.

Re: Ask HN: How much equity to accept as the sole tech co-founder in this case?

#12

Post by buzzthro » Fri, Feb 11, 2022, 4:41 PM UTC

daanlo wrote: post #3

I have a bit of a radical view on this: In order to be successful you have 10 years full of work ahead of you. In comparison, whatever is there today is nothing. If you are co-founders, then it should be 1/3 each and each with the same salary. At least this should be the default. You may have different needs, experience and skill sets and can of course speak about these openly, but 1/3 each should be the default imho…

What I've noticed when talking to non-tech co-founders that come with domain expertise/contacts or business chops is that they tend to figure that they can build an MVP and likely find product-market fit through a combination of founding engineers and contractors out in eastern europe. So they really don't want to give up equity. And later on bring in an external CTO to tidy up if necessary.

Re: Ask HN: How much equity to accept as the sole tech co-founder in this case?

#13

Post by buzzthro » Fri, Feb 11, 2022, 4:45 PM UTC

edmundsauto wrote: post #9

Are they asking you to choose between salary and equity? I wouldn't consider myself a co-founder with < 5% equity, and I wouldn't join a team like this unless my cash comp were 75% of my market rate. If you feel super strongly about the TAM and product idea, or need less cash - take a risk! But, for me (at FAANG comp), I would need something like $175-200k + 10-20%.

> Are they asking you to choose between salary and equity?

Kind of yes. Market rate (I'm also FAANG) with less equity or vice-versa. The equity ceiling is at 10%. The way I'm thinking about it is that given the amount of risk at this early stage with no prototype, customers or revenue and the amount of work involved, the expected pay-off for the time and stress isn't quite transformational for me.

I don't believe in giving up work-life balance and cutting my pay in half for the "startup experience". I wouldn't go pay 100k+ tuition for a degree in "startups" - whatever that means.