founder, co-founder, incorporation, vestingI have recently incorporated a delaware corporation.
10 million Authorised shares with $0.00001 par value.
My product is a tech product. So i’m planning to bring co-founders and investors after 6 months.
1) Is it necessary that I have issue shares myself now? Or i can do this later?
2) If i have to do it now, how much shares I should issue myself, considering i’m the person who had the original idea, who is gonna complete Minimum Viable product, Applied for trademarks and Patents, Incorporated the company etc.? I’m thinking 50%. Is that fair or I’m taking too much of the pie? (Planning to keep 20% for future employees. Other 30% will be issued for CTO, CFO, advisers etc.)
3) If 50% is sounds fair, do i require vesting?
My answer is a bit of a non-answer, but hopefully useful to you and others who stumble along this way later.
You have the cart before the horse. It is a specialised corporate finance/valuation question when you don’t have a business yet. Hopefully you have a product.
And if you are building the next unicorn, these decision can bite you later if you have problems or make a mistake on cofounders or investors.
The time to structure the corporation is once you are ready to share/sell/transfer equity. Once that happens, the new Delaware Corp buys 100% of your product and your business.
If you are worried about capital gains and other tax issues, you’ll have an opportunity for professional, timely and updated advice before that.
Until then you just need to make sure you/your company owns 100% of the product and the business.
Don’t offer someone 8% to build a front end and another VP 8% because he comes along at the right time.
Build your product. Prove your market. Once scale becomes a goal, there should be enough in the deal to get the best advice.
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