Reasonable share in startup company


I am working on a startup project (software) and I'm really enjoying it. I think the company has great potential.

Up until now, the work has been part time and I've been able to fit it into my spare hours, which is ideal because I have been working without pay because we do not yet have the money for salary.
However, that is beginning to change. We are seeking investment (which looks promising) and I am an integral part of a very small team.

My roles have begun to multiply. My work and feedback are respected and my decisions are helping to determine the future of the company and its products.

I have not, however, had a detailed discussion with the founder regarding payment. We have discussed this often in the context of a future agreement. I feel that now is the time to get something in writing.

If I'm going to continue to work on this project, and continue to take on multiple roles and make major contributions, I feel that the stake has to be quite high.

While I am not risking a loss of income at the moment by working on the project, this may very well change in the near future if I begin to work more hours and take more responsibility. That type of risk warrants a higher percentage.

I am going to approach the founder in the next few days regarding this matter. What is a reasonable percentage to request given the time commitment, work and the risks?

Software Co-Founder Payments Entrepreneurs Business

asked Jul 15 '11 at 12:55
Johnny X
11 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll

2 Answers


I have written this section a few times in other answers.

Share Split Guidelines We typically have a few standard metrics we use to run through how much a share is worth:

  • Idea: 3% - 5% - ideas these days are cheap, everyone is having them. It's execution that counts.
  • Technical: 15%-35% - all developers (including myself) think it's worth more, but if you don't have the rest in place then it's just a cool thing that sits on the shelf being worthless to everyone. This is what both your shares will be diluted down to to start with.
  • Marketing / Sales: 15% - 30% - This is pretty important, if nobody knows about you, you're nowhere ... but put KPIs against it - X new customers / sales in a timeframe.
  • Business: 20% - 30% - The leadership and vision, this is typically one or two people and they will make or break the company on its own, set the direction.
  • Finance: the remainder, depending how much they put up, others adjust accordingly.
Further reading before you jump These are similar questions where I have tried to detail out the wider questions you have sitting behind this current post.

Also have a look at how to earn an angel investor and technical staff for a perspective on your founders' side of the picture.

answered Jul 15 '11 at 14:25
Robin Vessey
8,394 points


Eeek, if you haven't discussed it yet that may be an uncomfortable conversation but something that has to happen.

If you are implementing his idea, he is marketing it, leading it, seeking out funding, etc.

Then 30% seems like a no brainer since you are not getting paid at all to work on it, and your pay out is based 100% on the success of the product. So, you are 'investing' a lot of time and energy into this endeavor which may or may not pay out and realistically at this point have probably done 75%+ of the work and spent the most time on it.

You might be able to get more, but that seems realistic/fair to me.
33% for you, 33% for him, 33% whoever is bankrolling it would make decent sense.
Or 25% for you, 51% for him 24% for whoever is bankrolling it if he feels he needs to remain in control.

answered Aug 14 '11 at 23:10
Ryan Doom
5,472 points

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