Drone · Healthcare

How much Equity to give a financial Co-Founder?

Mark Sendo Founder, CEO, Forbes Contributor, Conference Speaker, TechCrunch featured story twice

December 1st, 2015

We have a passionate technical team with deep expertise, along with healthcare professionals for our startup.  We have been around for about 6 months or so.  We are now in a position to do a large Seed round and have several potential suitors interested to lead as a co founding member of the team, for the financial portion.  How much equity would you suggest, and according to our attorneys we cannot compensate this person on a vesting schedule based on his/her's performance for fund raising.   Any suggestions would be helpful. 

Mike Moyer

December 1st, 2015

The easiest way is to use a convertible note or a SAFE agreement from Ycombinator: https://www.ycombinator.com/documents/

-Mike

Thomas Kaled Business Development Consultant @ thomas.kaled@gmail.com

December 1st, 2015

Not sure that I understand completely. If you are asking can someone find venture capital and how should I compensate them, this seems like one of the more acceptable formula's:exitpromise.com/lehman-scale

Not sure why you couldn't have a conversion to stock equivalent to the Angel or VC's investment rate hence if the angel and you agree $100 is .01% there is no reason why the 'money raiser' cannot convert equally.Actually an angel may be more comfortable with that.

The person raising the money however is going to have to disclose all this to the investor and it should be in the offering document as a prominent feature.You wouldn't want the money raiser to leave that to you and you don't want to waste time meeting Angel's or VC's who are in agreement or knowledgeable about how some portion of the cash they are about to give you is going to be used.

Regardless there has to be a timeline for performance so you are not forever waiting for funds. Anyone who wants cash up front for raising cash that is not yet there probably is not the person you're looking for given your description of the venture.