HACKER Q&A
📣 buzzthro

How much equity to accept as the sole tech co-founder in this case?


This is for a tech company that has a CEO and a CPO without a prototype, customers or any other full-time hires. They are about to close on their seed funding though and I'll be joining after right after that. The equity will be from the founders pool and the salary is somewhat negotiable between 100k-200k per year before taxes. In terms of the other founders, one of them has a gotten their startup acquired before for 10s of millions (I think - undisclosed figure but I put that number together from the parent company's total funding) and the other founder has no prior startup experience. One of them has some limited tech experience.

What would you accept in this case as the CTO?


  👤 PragmaticPulp Accepted Answer ✓
> They are about to close on their seed funding though and I'll be joining after right after that.

Hold on - They are raising funding right now, but planning on bringing you in after fundraising?

If you're truly a co-founder, why aren't they bringing you in now? I'd be concerned that they're using you to secure fundraising, but they're getting the best of both worlds by waiting until after funding to give you less equity than a co-founder.

Be wary of accepting a "co-founder" position where you're being treated more as an employee. They seem to be working to cement their status as the actual founders and add you on later with an arbitrary title.

Do you know how much equity they have? How big is this "founders pool" of equity?

Frankly, between the significant salary and the fact that you're being excluded from the founder's list before seed funding, I think it's more accurate to view this position as a regular post-funding early hire. I think 5% equity is not uncommon in these positions, give or take, though you could be able to negotiate more if they're really interested in bringing you on as an actual co-founder.


👤 daanlo
I have a bit of a radical view on this: In order to be successful you have 10 years full of work ahead of you. In comparison, whatever is there today is nothing. If you are co-founders, then it should be 1/3 each and each with the same salary. At least this should be the default. You may have different needs, experience and skill sets and can of course speak about these openly, but 1/3 each should be the default imho.

👤 edmundsauto
Are they asking you to choose between salary and equity?

I wouldn't consider myself a co-founder with < 5% equity, and I wouldn't join a team like this unless my cash comp were 75% of my market rate. If you feel super strongly about the TAM and product idea, or need less cash - take a risk! But, for me (at FAANG comp), I would need something like $175-200k + 10-20%.


👤 arrakis2021
Post funding, pre product, pre revenue, Salary CTO, with experienced Founders? 5% would be good, 10% would be better