Things to Consider as a New Technical CoFounder


1

I have been offered a position as a technical co-founder (composed of 3 cofounders).

We're in the midst of trying to figure how much % of funding we want.

We have between 45-60% of our company could potentially be investor driven.

Is there someone to determine just HOW much percentage (%) we actually need of investors? keep in mind, this is a startup, we have the basics: developer, (2) on business end. Right now... we have 60% of it to possibly be invested, is this too much?

Anyone?

Co-Founder

asked Apr 25 '11 at 22:54
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User9968
229 points

1 Answer


2

I think you reason the wrong way. You should reason in term of the amount of money you need. Then you can discuss the correspondence between shares and money, but this is not because an investor bring half the money that he will have half the shares.

Let say that you need 1M$ for the first year. And that you bring 10k$ each. So you need investor to bring 600k$. Suppose that you value the technical skills, the client address book that the founders bring to 500k$, then it is fair to assume that 66% of the shares is for the (real money), meaning 36.6% shares for the external investors (because the value of the firm is 1.5M$).

I think that for the first round of investment you should keep control of the company. Afterwards it is up to you, depending on how profitable is the company.

answered Apr 25 '11 at 23:59
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Sylvain Peyronnet
371 points
  • So you are saying we should only be using what we actually 'need'? – User9968 8 years ago
  • One of the business founders wants so much investing since he doesnt have any income coming in, is this a good thing or bad thing? – User9968 8 years ago
  • This is only my opinion, but yes for the first comment, and bad thing for the second comment. If a founder is not ready to take a risk, how can you ask to investor to do so ? investing is no a charity business. – Sylvain Peyronnet 8 years ago

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