Technical Cofounder - How much equity do I ask for?

Possible Duplicate: Forming a new software startup, how do I allocate ownership fairly?

So, the situation is this:

Last year I was working freelance, and I was commissioned to build a web app. I did, I was paid, we deployed, everything went very smoothly.

My client at the time mentioned that he wanted to give me a 10% equity stake in the business. I'd heard that line before, I said I'd consider it but didn't formally agree to anything.

Since then, I've got a full time job, which I've been doing for the last year. Over the last year, I've also been working on the web app -- I know, terrible idea as a freelancer to work for free, but money hasn't really been a concern for me, and it was a pretty interesting project to keep as a side-project. I probably spent at least 2-3 times as long over the past year working on the site as I did building it in the first place. I don't regret any of this, it's totally fine. I haven't billed for any of this work.

Now, it's come to the stage where he and I are both interested in formalizing a business arrangement / equity partnership; I've invested enough time in the app that I'm convinced it's a worthwhile venture, and he wants to make sure I'm invested in its future.

He's offering me 10%. I think I should be getting at least 30% (I haven't yet replied to his offer). I know I'm not entitled to anything, and I'm not framing this as any kind of legal question -- I just wanted to see what you guys think I should be asking for. At this point, neither of us have any strict obligations, and I'm free to walk away entirely if we don't come to terms. I don't feel I'm owed anything, but I would like more of a stake if I'm going to be investing this much time on top of my day job.

I'd be working as a sole technical cofounder -- basically doing all of the work around building, upgrading, scaling + managing the application. My (potential) partner would be handling the business end.

Am I justified in asking for more? What kind of percentage would you ask for in this situation?

Any advice would be much appreciated!


Co-Founder Equity Business

asked Nov 5 '12 at 04:16
121 points
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