Company Equity

Discussion in 'Growing and Managing a Business' started by likethebird, Jul 2, 2014.

  1. likethebird

    likethebird
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    Hello,

    I started developing a tech company over a year ago hiring designers and developers to work on my product. After 10 months of development, I offered a position to a developer friend as CTO with 7% equity, to which he accepted. I have since been paying him for his work and even hiring other developers that can provide development outside the CTO's scope and capabilities. I have been advised that 5-8% is typical for a chief level executive.

    Since starting the company, I have bootstrapped 100% of the cost for legal, dev, design, promotions...everything. The cost/liability of this venture has not been shared with the CTO. Since I am the founder, I am fine with this and it is all on me.

    Recently, he has been dropping hints of wanting more equity than we agreed to, even showing an infographic of co-founders (remember, I did this solely without him for 10 months) that are split 50/50.

    I want to make sure everything is just and fair with this venture, hence why I am posting in this forum for advice. Is 7% equity a fair incentive for a developer that is still being paid for their time on top of having to hire other devs? Please note: this venture has not made money yet since we are still in the seeding and dev stage, so all of these figures are just numbers anyway...right now.
     
  2. Alex PG

    Alex PG
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    The truth is there is no single right answer. But, there is one wrong answer however - 50%/50%.
     
  3. jackkalls

    jackkalls
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    Well I founded a business, I am Chairman, while my CEO is having no share in the company, it is not needed to give equity, you can always find the guys who can work for salary only.
     
  4. boysingh

    boysingh
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    hmmm, interesting, so it's how it works for your business..Usually it is really the goal of some, to work and get their salary..
     

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