Business Development · Cofounder

What is the average equity to a COO or CMO if they join as cofounder

Kaustuva Mukherjee Seeking growth marketing and biz development co-founder

March 11th, 2018

What is the recommended equity to someone who will be be instrumental in fundraising, growth and business development if the product has already been developed? Should I consider giving more equity to someone who has industry experience (marketplace) or ICO experience?

Paul Garcia President at TABLE

March 11th, 2018

Many people will recommend the book "Slicing Pie." I'd like to recommend you consider the skills you need without the title inflation. Just because someone is first, doesn't mean they deserve a C-level title. Those titles actually mean something specific, and if you give them away early, you won't have a place to elevate anyone. Try Director when you have your first departmental hires, even co-founders. Not everyone cares about their title, just their responsibilities. If you can avoid giving equity, then don't do it.

Consider why you think you need to give away equity. Is it because the new hire has requested it? Is it because you cannot afford to pay salaries? If you aren't ready to pay salaries, are you even ready to take on more people?

You've indicated you want someone for fundraising help, someone for growth, and someone for business development. That's three people or three skills, not one. They aren't likely to overlap. What is your skill? How was the product developed? And have you proven market-fit yet?

Consider some other compensation alternatives like deferred salary, vesting stock options over time, and pay-for-performance. All the equity you give to employees reduces what you can offer to investors (if you're seeking investors).

You state ICO experience. I don't think you'll find anyone who has it, if you're referring to an initial coin offering. Experience can also only tell you what someone was asked to do, not what their capacity is. And not all experience is quality experience. Instead, make a list of the specific skills you need supplemented in your business and look to how you can determine someone you interview can demonstrate their talent in those skills (not simply based on experience). Give them a problem to solve or a week-long exercise to complete. Pay them for it. And then hire them if they not only complete the task well, but you communicate well and don't need to entirely supervise their work.

Mike Moyer

March 11th, 2018

The average equity for any position is usually wrong. This is because no matter how careful and thoughtful you are, things never turn out exactly as you expect so the equity split must be renegotiated over and over as people come and go and things change. Trying to figure out the right equity share for someone joining a company is a common, but ultimately futile effort.

Instead, think about it this way:

Imagine that you were simply hiring this person and paying him a salary. You would negotiate a fair market salary based on your needs and his education, skill set, experience, connections etc. You would make an offer, he would make a counter offer and you would negotiate a fair salary just like thousands of people do every day.

Now, if you paid him his full fair market salary he wouldn't expect to receive any equity. Most people with jobs don't own shares in the companies they work for, they just get paid.

But, let's say you can't pay him anything. His unpaid salary, therefore, becomes a "bet" on the future value of the firm in terms of profits or proceeds of a sale. Every day that he shows up for work and isn't paid is an additional bet.

You, too, are betting your unpaid fair market salary. Any money you put in is also a bet.

In fact, anything anybody contributes to your company is placing a bet, unless you pay them the fair market rate.

Betting continues until you reach breakeven or series A investment.

When the betting stops, each person's share of the equity should be based on each person's share of the bets. This is obvious, logical and knowable.

Right now you're trying to guess and you've come to this forum because the answer is not obvious, illogical and unknowable. Some people may have better guessing techniques than others, but it's still just guessing.

Basing the split on the bets placed, therefore, is pretty much the only way to ensure a fair split. Any other approach is just a guess which will probably be unfair. The guessing model is extremely common, but so are equity disputes. The betting model virtually eliminates room for error.

Many people think it would be nice to know, in advance, what their share will be. When you give someone a fixed % in advance all they really know is that it's bound to change and the change will happen because of a fight.

The betting approach, also known as the Slicing Pie model (mentioned in another answer), is used all over the world by startups who want a fair split. You can learn all about it at

David M

March 13th, 2018

Slicing Pie has its attributes, and is certainly better than throwing darts. The only issue I would say is highly challengeable here is that Mike states , "Now, if you paid him his full fair market salary he wouldn't expect to receive any equity. Most people with jobs don't own shares in the companies they work for, they just get paid."

True with non startups and I am assuming that is the context of the reference. But that is not the case for you. This is not a "job" this is a founding C-level position which is COMPLETELY different than a normal C-Level position. Much more is asked and expected. Even if you could pay a founding COO or CMO market rate, a good one is still going to want a piece of equity because even with the fair market salary, being involved in a start up is still a risk. A reputable C-level exec is usually tied to numerous other boards or even startups...could be a dozen around the world. Even though you are paying them, they have other groups offering to pay them AND offer them some form of equity. They are looking for the big payout and that comes with equity not salary. The risk of involvement with an unsteady business still deserves equity regardless if you are paying them. BUT they have to pull their weight and for that consider the slicing pie. But consider vesting too as that is what most will see as a standard. And several of the issues Mike points out are a negative of traditional fixed equity splits and vesting, are not inherent of properly contracted fixed equity deals...many of the ones he points out in his book face problems because of improper contracting and structuring in the founding documents that could have been avoided if the entrepreneur understood founding documents and bylaws. Many fail because entrepreneurs do not understand entrepreneurial law. But yes many also fail due to entrepreneurs getting in arguments because they dont earn their weight and for that some form of accountability through a system like or similar to slicing pie makes a lot of sense to evaluate.

Whatever you do, don't do what a young entrepreneur did to my friend and I early in college. He sat us both down and said "I value both of you working for my company. I want to give you both 51% Combined. I looked at my friend and we both smiled..and then I said "While I appreciate the offer, you do realize you just offered controlling interest of your company?" He sat back and said "I mean...49% between the two of you." That is something you never want to do!

Dane Madsen Organizational and Operational Strategy Consultant

March 15th, 2018

You can get people for little equity, but you do get what you pay for; cheap people bring zero results. Having a finished product is nice but can be an issue for an experienced executive, depending on how you did your product/market evaluations and use-case development. You should always first look for a person with industry background when possible. The roles you identify likely require you to set aside significant equity to attract a seasoned professional with presence, experience, and creativity. You can make all equity subject to vesting, but if you do not provide this person incentive, do not bother.

Sandeep Pai Solopreneur | Internet Marketer | Affiliate Marketer |

March 11th, 2018

As per my experience, you need to check if the person who is going to be your COO or CMO possess the same conviction as you do. Does he/she believes in your product as much as you do?

Secondly, they should be passionate about what they do - You can identify this in several ways.

You can decide on offering them equity once you are through with the above 2. I hope it makes sense.

Good luck.


Sandeep Pai Solopreneur | Internet Marketer | Affiliate Marketer |

March 13th, 2018

There are no standards as such. One can give them equity based on the amount of value they possess in-terms of experience, domain knowledge, network/connections etc. Based on all these you can decide.

MARK S. 3x Entrepreneur (Sold my 2nd) Biz Conslt. & Tech. Founder

Last updated on March 12th, 2018

Depends alot on how vast you think the growth will be. For instance a mid-sozed biz with a yrly. gross of $400k would be different from a biz at $5M/yr.

In short, I'd say make the offer tied to their industry experience, how integral they are & of course their commitment level. For my Tech. startup, I'm entertaining 8-15%.

Dave Jules Founder and CEO of Underlined Apps

March 14th, 2018

This is probably the best explained blog on splitting equity available online.