We are a group of 5 people working on an idea for a start-up. The aim is to find an investor that would allow us to develop the project fully. Now we're just at the idea and presentation stage.
3 of us are the "idea" people, the ones that had the idea to start with. These 3 people have very similar skills, sales and marketing. They brought in 2 other people: a lawyer and a technical/design person. This is a web start-up project that could be very big in terms of organization, building, launching and development.
We are trying to figure out how to split equity and duties.
A few questions:
Any advice on what would be the best way to organize this start-up and what is the best solution to present the team to an investor?
Thank you for your help.
As the resident expert on equity split, I'll try to give you some pointers...
You are already 5 people, and 4 are not producing anything: you only have one developer.
Splitting equally among 5 people is a very bad idea. Who is the main driver for the project? Don't say that all 4 or 5 people are equally passionate about building this product.
And by the way, an investor will not get the majority of the shares, at least not in the first round of investment. They'd typically get from 20% to 45% of the company.
My main advice: stop presenting your idea and start implementing it. That means both actually coding, and finding the first users or customers.