Whenever equity is expressed as a percentage you have a “fixed” or “static” equity split and sooner or later someone is going to get screwed. If you’re not the person getting screwed then you are the person doing the screwing. It’s unavoidable. This is because the percentage you recieve is based on the assumption that you are going to provide exactly 23% of the inputs necessary to reach breakeven or series A investment. It’s impossible to predict future events and, therefore, impossible to predict equity.

Instead, think of it this way:

Let’s say that you are responsible for building and designing the entire web app, coding the Frontend, backend, and digitizing all requirements for our proof of concept. But, you are going to get paid cash, instead of equity. You are simple being hired as an employee. What would you get paid? Would you get paid by the project? An hourly rate? An ongoing salary?

Whatever you negoitiate as cash payment is your fair market rate. If you get paid your fair market rate you don’t deserve any equity because you aren’t putting anything at risk. If, however, you aren’t paid your fair market salary the unpaid amount is, in effect, at risk.

Your share of the equity should be based on what you put at risk relative to what others put at risk.

For example. If you are worth $100,000 a year and you work a year without pay you are putting $100,000 in unpaid salary at risk. If your partner puts $200,000 at risk he deserves 66.66% and you deserve 33.34% This is a logical, obvious, unambigious conculsion that is perfectly fair. There’s not guessing or predicting. Your at-risk amounts can easily be calculated.

Any other approach is going to be unfair.

This approach, known as The Slicing Pie model, is used by thousands of startups all over the world and it never fails. You can learn all about it at www.slicingpie.com