HACKER Q&A
📣 ramtatatam

How to land at fair shares distribution between founders


I am about to meet with a colleague who I'd like to invite to my side gig.

I call this side gig, but I already validated the idea and I know who needs the product, I also have some connections who are decision makers and in genuine need for a product I'm about to build.

I'm coding myself, so I will be contributing (though this colleague is more skilled than myself).

What would be the fairest distribution of shares? In the past I had some bad experiences where decisions like this was left till the end causing tensions. This time I would like to settle everything upfront so everything is fair.

Does validated idea count like something valuable enough to translate into more shares than colleague? Or should I just do straight 50/50? I was reading lots of stories where people advice against 50/50 to avoid blockages in making decisions.

I was thinking about decision power and share in financial matters. I don't mind to do 50/50 when it comes to financial stuff, though based on above thoughts I think it's fair to talk and negotiate about decision power.

Or maybe I'm totally wrong and should not even think about these matters at this stage?


  👤 giantg2 Accepted Answer ✓
You also have to think of possible future ownership dilution if you bring other people in or look for funding. If this idea has a chance to be very lucrative and turn into a fulltime company, then you should probably have a lawyer draw up documents.

If this is a smaller venture and you don't see this developing into a fulltime job, I would say give them a cut of the profits without ownership (like some company's yearly profit sharing). This gives them incentive in the company performance but you retain the final say.