I am in some what a unique situation. I work for a friend owned software services company which has only 1 share holder - Founder & CEO. I joined them to execute on a product idea that the Founder had. I decided to take 2/3rd of my market salary in the hope of a significant equity and seeing the product to the market. There was no written agreement. I worked on it for 2 years with a team funded totally by the Services company. We are thinking of spinning this off as a separate company and raise some funds. All of the investment came from the services company (single owner - 100%). My financial contribution was the difference between my market salary and what I was paid.
In the new company, I will be the CEO. What equity should I expect? I have been offered 15%. Is this fair? The Founder does not want to be involved in the new company and wants to retain 51% share. The rest is for new employees etc. Should I negotiate for a co-founder title? What trigger events should I be worried about given that I am not the majority share holder?
Thanks. Very helpful. We have not talked about the vesting schedule. My assumption was that since I am a "near-founders", I 'own' those shares. Isn't that the case? By 'co-founder' title, I wanted to ask if there is anything that provides additional benefits for being a founder/co-founder vs a regular equity holder (not options holder).
Since you have been paid 2/3rd of your market salary, I think 15% is a fair offer. You can maybe try to negotiate for something more, like 20%, but for me it's a reasonable deal.
On the other side, there are quite a few important things you haven't mentioned in your question and that you must really clarify:
As for the "negotiate for a co-founder title", I don't really know what you mean.