Cofounder · Equity distribution

Difficulty tech people faces

Sumeet Jadhav CTO/Project Manager/Developer

Last updated on October 15th, 2020

Everyone wants to grow and everyone wants to earn well,

I am also tired of my 9 to 6 job and want something of my own.

And as everyone has their own personal set of skills,

My skills include handling/developing tech products.

I have a few questions that are troubling me a lot

1) We get requests regarding developing MVP's, the issue we face is

exactly who to trust

it happened twice with me that the founder promised a lot that he has done all the research and has talked with potential investors they are just waiting for the MVP to be developed and all

& my team burned 4 5 months of sleepless night developing the product for free

and afterward, within 2 months, the founder moved on saying he is not getting a proper response from investors

And all our hard work now means nothing

And as reputation is everything this affected badly on my image as I bring these founders

So what should I keep in mind when selecting a co-founder & avoid this to happen again

2) Equity battle:

As a tech person who is developing the product & also handling the team of dev's

how much of equity should I ask for, as we invest via sweat equity only

As per me, I think a tech team who is not investing money but developing the product from scratch for free should get 40%

Am I right here?

Matt Mansour Technical CoFounder

Last updated on October 16th, 2020

I solved this problem a long time ago and now I am in a great spot.

If you're a maker you need to make sure one of the cofounders is a proven marketer.

The idea means very little.

When someone comes to me looking for a tech cofounder and starts pitching me the product idea I stop them right away.

Then I have them tell me about their "ideal customer". Then I ask them if they already have a list or tribe of their customer built.. you have a large Facebook Group, a large email list, a huge instagram following, etc...?

If that looks legit and I can see they're an authority figure with a tribe, then we can move on and talk about the product and equity split.

If they do not have the above part figured out yet I am not interested in learning much more about the product.

I also avoid most critical mass products. e.g. Hey I have an idea for the next Tinder..

With the model above you can often skip needing funding as well.

If you have 10 years experience bringing tech products to the table. One of your cofounders needs at least the same amount of experience building sales funnels, building tribes and ideally already serving that tribe in some capacity.

Also, if you're sweat equity then ask for an equal split 50/50. or 33/33/33 (three cofounders is a sweet spot).

There can be a vesting schedule to make sure you don't bail out early.

Best of luck.

I felt your pain for years.

It's fixable.

Paul Garcia marketing exec & business advisor

October 16th, 2020

This sounds like a series of poor choices and accepting too much risk. The first one is working for free. If an owner doesn't invest their personal money in the business while seeking additional funds, that's suspicious. Being asked to work extraordinary hours with only a hope of reward, that's unreasonable. Starting with product development and not marketing strategy to define what the product should be, that's plain wrong.

It sounds like you may need more practice at understanding what a healthy startup looks like, and only getting involved in those, not just wild promises. Don't ask for equity, equity is earned not given. Don't work for free. You should be getting at least enough money to cover basic needs (food/shelter), no matter what. If your startup can't cover that, run, because they're not likely to make up for it later. Building a company entirely on someone else's money is a true rarity, meaning many entrepreneurs start too quickly.

You are not a co-founder unless you share an identical vision for the company and are motivated for the same reasons. Otherwise you're just a first employee. And employees should be paid.

The simple answer is make better decisions. It's not about trust. It's fundamental practicality. Handling/developing tech is a commodity these days, not special. Unless the business is personally meaningful to you in deep ways, stop gambling. There are plenty of people willing to pay you money if you're talented.

Steve Owens Startup Expert

October 16th, 2020


Being an investor is just as difficult a job as being a tech guy developing products.

I am sure you would not recommend that an investor develop his own product himself? Stop trying to do something your not good at and partner with someone who is a good investor - along with a bunch of other people with other skills.

If they can not raise enough money to pay you, then it is very unlikely they will ever be successful - therefor, its a bad investment.

Most "real" startups pay a competitive salary and give option in the company.