My friend told me about an idea she had for some healthcare software. I told her it’s a great idea and that she should get it built. She didn’t do anything with it for a month or two so I said I thought it was a great idea and wanted to get involved. I first said that I wanted to project manage for 10% equity. I find myself doing more than simply project managing and I’ve found a CTO who will take equity and cash. I asked if I could be a cofounder and my friend said fine to that. It seems like the idea is hers but that’s where her contribution stops. The rest of the work is mine and the CTOs. I feel like I want more equity to be more invested and maybe I deserve it. How much equity is fair for me to have?
The idea means nothing without the execution. Generally, cofounder split is based on risk taken during the forming of the enterprise and on responsibility. It sounds like your friend wants to do nothing.
I can’t stress this enough: this is not a good look. You barely just started this business relationship and it already looks like your friend will be dead weight forever. It also sounds like she may not even want to build this at all, given she isn’t doing anything.
I see 2 scenarios: 1) if your friend had the idea, she gets a minority cofounder stake but if you’re going to execute, you split the remainder with the CTO (and get a CTO who will also be cofounder) or my favorite: 2) you run for your life and get out of this situation because this is bound for disaster.
Thanks for your reply. Why is it bound for disaster? She will not be able to execute without me, you are right. She has terrible health issues. I don’t mind everything the CTO won’t do but I just want to be fairly compensated for it.
As mentioned above you have nothing unless you have execution. You should be no less than 49% equity holder unless she’s going to be funding the entire project herself and paying you for all your time and effort. Who is going to be leading the sales effort?