equityIn a group of founders who are working based only on sweat equity (no money involved for formalizing the deal) is it fair for each one of them to hold equal shares of the business? Let’s say for example in a company where one of the members is responsible for some kind of work that will affect only the beginning of the company, and after it is in normal operation this partner will do little to no work.
If that person is only going to work at the startup for a short period of time, are they a founder? I personally wouldn’t consider them a founder and would find some other way to compensate them.
If you can afford it, a salary is probably the best way to go in this situation. Alternatively, you may be able to get them to work for an IOU. If your only option is selling them ownership of the company in return for their effort, I still would not consider them at the same level as founders. They likely shouldn’t get the same percentage of ownership and their equity would vest much differently than the founders.
No. The one who does more work should have more ownership. - This is a really good tool to use. http://foundrs.com/
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