I have a few questions regarding equity distribution that I would like to get cleared out, since I am the core developer and CTO of this project and have very little idea on businesses etc.
My Situation is like this -
Founder 1 - Investor 200k, came up with the idea, invests say 25% of his time.
Founder 2 - Developer, no funding, came up with the idea that makes this system unique from other existing ones, invests 50% of his time, and is a final year student.
Founder 3 - Investor 200k, helps develop the idea, has necessary contacts to get this business running very quickly.
I am Founder 2 in this situation.
What would be the idea equity distribution among us.
Currently this is what founder 1 and 3 have in store for me -
Founder 1 and Founder 3 own an LLC 50% each,
this LLC owns 85% of the company that will run the business. and they are offering me 15% non dilutable funds in the daughter company.
I am very new to this and want to know what Im getting into.
Unless there is a clear and present reason to create subsidiaries and other legal structure or separate classes of equity, it's a good idea to hold off. It can always be added later.