Re:Ask HN: How much equity should I ask for?
by Silhouette on Wednesday June 08, 2011 @05:35PM
(#2635123)
It's hard to answer questions like this without knowing more of the back story and the other terms, but presumably you're not in a position to disclose those without compromising your anonymity.
That said, it sounds like he's got the idea, most of a working prototype, and started to secure outside funding. That means joining the venture is significantly less risky for you than it would be if you were coming in before the technology was proven and when you had to put up significant amounts of your own cash to co-fund the early days.
I think that means the two big questions are whether you have something unique/personal to offer that it would be hard to find elsewhere, and how much you're getting compensated aside from the equity.
If you could be replaced by someone else with a similar skill set and you're being paid a decent salary on top of the equity, then you're really more like employee #1 than a co-founder, and I'd say you were probably doing well to get 10%. (10% of what, by the way, if outside investment is already involved in some form?)
On the other hand, if you have particularly relevant skills or insights that would be hard to replace and you're being asked to work primarily for equity in the early days, then you're more like a co-founder even if you're not co-funding at this stage. Now it's down to the proportion of the work to make the business a success that will be down to you, and if you think that's more than 10%, you should probably look for more than 10% in equity as well.
Just MHO, and based more on second-hand anecdotes than personal experience since none of my companies have been in a directly comparable position, so take with liberal salt sprinklings...
That said, it sounds like he's got the idea, most of a working prototype, and started to secure outside funding. That means joining the venture is significantly less risky for you than it would be if you were coming in before the technology was proven and when you had to put up significant amounts of your own cash to co-fund the early days.
I think that means the two big questions are whether you have something unique/personal to offer that it would be hard to find elsewhere, and how much you're getting compensated aside from the equity.
If you could be replaced by someone else with a similar skill set and you're being paid a decent salary on top of the equity, then you're really more like employee #1 than a co-founder, and I'd say you were probably doing well to get 10%. (10% of what, by the way, if outside investment is already involved in some form?)
On the other hand, if you have particularly relevant skills or insights that would be hard to replace and you're being asked to work primarily for equity in the early days, then you're more like a co-founder even if you're not co-funding at this stage. Now it's down to the proportion of the work to make the business a success that will be down to you, and if you think that's more than 10%, you should probably look for more than 10% in equity as well.
Just MHO, and based more on second-hand anecdotes than personal experience since none of my companies have been in a directly comparable position, so take with liberal salt sprinklings...