Getting involved in startup, equity negotation advice?

[lapoker17]

yeah for what this sounds like boris is right - i actually think 5% is high but if the other dude is the only other equity holder then it sounds semi reasonable.

[Chips Ahoy]

5% sounds low for now. There will be further dilutions for financing or new hires, right? Planning to dilute often makes it easy to fix mistakes and means you don't need a crystal ball today.

[Jcrew]

Bring up a spreadsheet and try to monetize as best as possible who is bringing what to the table and that should give a baseline of roughly what your equity should be. I would probably guess around 5-15%.

[lapoker17]

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Bring up a spreadsheet and try to monetize as best as possible who is bringing what to the table

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with the info we've been provided i would advise op against doing this at all costs.

[garcia1000]

I think your worth to the company as a startup is low. What special skills are you bringing? Unless you are also going to be asked for strategy advice or similar, a programmer isn't one of the vital things for a startup.

[renodoc]

How much $ is Joe putting into the project?

[durron597]

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Now that I think about this more, what this concern really is is, should I be getting involved in this at all?

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See that's what I mean. If you want a big share then you are saying you are going to do all you can to make the company successful (in addition to having the skills). I don't know about you, but I know that for me, I have a very hard time committing to something I think is effed to begin with.

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i had a 2 hour dinner meeting with him (the interval between my posts in this thread), i don't really want to post anything more specific anymore but i will say that he put me at ease with the trust issues i had earlier; i will answer one question though, Joe is the sole financer of this company. also i should add that the reason i thought it was effed had more to do with the trust issues i don't want to go into and not the idea.

to provide a bit of closure, the numbers that were discussed were near what you would expect given the numbers in this thread. i should mention that Joe doesn't view me as just a "programmer" but more as someone to have design and business idea progression ideas (even though my background is pretty much exclusively software).

[carnivalhobo]

this sounds a hell of a lot like a HBS case im supposed to be doing right now.


the only capital is Joe's savings?

EDIT: just read your last post. 5% seems fair off the top of my head.

[highlife]

If this guy is just "An acquaintance from High School", why did he come to you? I mean, how does he know you have what it takes to make his business a success?

I'm not trying to imply that you don't have some very desirable skills, but just to explore why he picked you. How much did he really know about your capabilities and past successes? If he is just picking you because you are the only experienced programmer he knows personally, then you might want to consider his aptitude to run a business like this, and thus its not worth your time.

[wdead]

Sounds like main guy should get 51-70% equity and you and other should split based on value added.