Equity distribution

What is an appropriate equity percentage for a founder leaving the company during the concept phase?

brad cole Co-Founder, Tech Startup, Experience in a Fortune 250 Media Company

May 2nd, 2017

There are three founders, the one leaving the company had the original idea but it has evolved considerably since. We have yet to start development or build the product.

Paul Nielsen

May 3rd, 2017

the best answer is that you have an equity agreement in place that spells our the answer, but I'm guess you didn't do that. If he had the original idea and has now bailed on the startup, I would think that you need to appease him so that you don't get sued. If it were me, I'd give him 10-20%.

Jacob Judah innovative iOS developer

May 4th, 2017

I would tell him ideas mean nothing and its about the execution!

There is no such thing as "the ideas guy"!

Unless he wants to invest heavily so he has something on the line , if not...cut him loose and get on with it man!

(I doubt he will ever try and sue lol)

Elgin Saul Co-founder & CEO @Elfil Agrovet International Tanzania Limited

May 3rd, 2017

Below 50%

Corey Hobensack Aspiring CEO/Founder

May 3rd, 2017

With three founders and one creating the idea, I would recommend 20% which leaves you and your co-founder with 40% each since you two will be continuing the idea, investing the money into it, and maintaining its existence. Best of luck to you all.

brad cole Co-Founder, Tech Startup, Experience in a Fortune 250 Media Company

May 3rd, 2017

Thanks for the insight everyone.

Lydia Sugarman Entrepreneur. CEO + Non-Technical Founder. Seeker. Thinker. Drinker of bourbon.

May 4th, 2017

Zero - 5%. The germ of an idea is worth less than nothing. Consult an attorney and draft an exit letter for him to sign giving up any and all claim. If it's been a short while, less than 12 months, and he's abandoning, he wouldn't have vested in any stock if you'd put all that in place at the beginning.

If you want to be really nice guys, you could give him what you'd give an advisor. Just be aware that you will have to explain this to any future investors who probably won't like it.