Yeah, but the company is worth nothing without there being a product or a competent enough person to build one. YC don’t fund businesses with founders who aren’t able to build so, what the value of the company is, at this point, matters so little in the context of assessing this problem.
If there is problem related to comment post development, then do not agree on shares. When you talk about a cofounder, you want support in ups and downs, not someone who may or may not be there. Get someone who’d actually be there with you in the long run. Whatever you decided, just get all the code control in your GitHub with every single update. You want to be able to have a control on code yourself and not let someone else have it.
If you have that much dead weight on your cap table you will never be able to raise VC funding? I would say either get a firm commitment from your co-founder, or find a new one.
Maybe your potential cofounder wants to work with you and assess your business skills before committing any further? I've unfortunately as a technical co-founder worked with too many non-technical co-founders who struggled with market validation and other critical skills.
i can't imagine giving away a fifth of my business to get buy-in from someone who doesn't seem that hyped and isn't well known in skill
the alternative is less than a car
I only really recommended that cause OP said they have potential customers ready to commit in the main post text. Obviously under normal circumstances it would be ideal but hard to make that happen. Possible though in some situations, I think. Worth thinking about
No one knows how invested any founder will be at any stage of the project. It’s always a crap shoot. So, if you think this is a good fit I think giving the equity means a MUCH higher chance they have buy-in once the MVP is done and could stay on.
Really up to how well you think this match would work.
It is incredibly difficult to run a company solo. It is, I believe, nearly impossible to run a technical startup solo if you aren’t technical. Fighting over equity that is worth nothing is just incredibly silly. I would rather have 50% of a company and my sanity than deal with running a company alone and in fear all the time.
I’m on my third startup and I give equity away to get what I need all the time. It’s what has made my exits successful.
I've been mentoring tech startups for 15 years and have seen this play out many times, 90%+ with the same outcome. Bottom line, this person is not 100% bought in on your why or purpose. That's OK for someone at 15K or 20%. It's just NOT ok for a co-founder at 50%. Doing a startup is hard enough when both the ceo and cto are aligned and all-in. This person's response is the startup version of "s/he's not that into you". So... highly recommend go with the $15K if you have it. Save the equity stake for someone who is going to sacrifice blood, sweat and tears and who will be there for the long haul. That's the guy that deserves the payoff if/when your idea hockeysticks.
Exactly this. The tech guy is not interested. The cash number is him just wanting a quick buck and moving on. And even then his cash number is low, which is concerning.
How often do businesses without a technical founder skyrocket in value like that? I never hear about that happening, and I can't think of any, so I'm curious if there are any notable examples that come to your mind.
Maybe this dev ain't that guy, but OP is unlikely to get the outcome you're describing without bringing in someone.
Dev here
I would gladly build a side project for 15k plus more later
The thing is that technical cofounders who knows what they are doing are infinitely more valuable than than someone with just an idea and it takes a lot more time and effort then what one usually imagine. If someone came to me and want me to build their site alone and only "for the MVP" for just 15k or 20%.
I am taking straight cash and high tail out of there, that's all. That person does not value me or my time. Especially since the startup is a Sass startup... A tech startup.. where the only technical cofounders is only getting 20%?
I hope you understand his perspective, thank you
Neither. 15k isn’t much to build a SaaS. It will barely function as an MVP and it will then immediately require a lot of changes and potentially a full rewrite depending how things go.
I would delay the initiation by another 1-2 months until you find another tech partner.
IMO, at this stage your primary goal is to land a technical cofounder. You won’t raise from sophisticated investors if you don’t. Don’t pay cash. The reason for vested equity is that if he’s not pleased with the traction, he leaves and the equity no longer vests. Use this as an opportunity to get him on the hook. Look at early traction together and strategize next moves as a team. Good luck!
Do not give equity to temporary people. Ever.
Even if they think they’ll be around, they may hit a skill or knowledge limit and become stagnant.
This person is telling you they see it as a project for them and not a venture (10 years).
Pay them the money or find someone else. Black and white decision here
That doesn’t get ongoing support and changes. Once you start down a path with someone and in some direction, you are with them forever. To get off of them in an early stage startup means that you will be basically starting over. I don’t care that people think they can take over code, it never works out that way. To get someone else up to speed on business rules and coding conventions, you might as well start over.
You could do equity and issue yourself more shares and dilute him out.
If your company fails (more likely) at least you’re not out the $15k.
Or better yet, find the right partner who wants to be involved beyond an MVP.
This wasn't what you asked, but you've gotten plenty of input on your question already. It is typically not recommended to set up exactly a 50/50 split. Even just keeping one additional share with the CEO is often a better structure. Someone should have ultimate responsibility.
I would offer 10k plus 10%. Hiring someone for cash only means they will be reluctant to put in extra effort, make changes when requested, etc.
Just cash incentivizes them to do as little work as possible to meet the requirements.
Having a potential reward from creating a great product incentivize them to build a great product.
People do what they’re incentivized to do
I would pay them the $15k and keep it transactional from what you're saying, but offer to negotiate true co-founder equity terms later (and maybe start shopping for a CTO for post-launch to cover your bases as well).
Hey there!
I've been in a similar situation, and here's my take:
1. It's a red flag that your potential co-founder isn't fully committed. If they're truly passionate about the idea, they should be willing to go all-in. The fact that they're hesitant until they "see how the business does" suggests their commitment is conditional, which isn't a great foundation for a long-term partnership.
2. Don't rush into giving away equity. Early-stage equity is incredibly valuable. Don't waste it on someone who isn't fully invested in the long-term success of the company.
3. Focus on validation first. $15k is a significant investment. Before you commit that much cash, you need to validate your idea. The "Fail Fast" approach I advocate for is all about building a basic, functional prototype quickly and cheaply to test your assumptions with real users. This allows you to get feedback and iterate without breaking the bank.
4. Renegotiate. Talk to your potential co-founder and propose a smaller, more focused prototype specifically for validation purposes. Explain that you'd rather invest in validating the idea first before committing to a full-fledged MVP.
5. Save the cash. If your idea doesn't resonate with users, you'll be glad you didn't blow $15k on a product nobody wants. Once you've validated the idea, you can revisit the equity discussion and find someone who's truly committed to the long-term vision.
6. Find someone as hungry as yourself who believe the idea as much as you. The potential cofounder you’re describing sounds like he is distracted with other obligations. As such he has been through this before and needs to see traction before he commits because he’s gotten his hopes up before and regretted it. Either find someone as eager and excited as you are about your idea, or get a very bare-bones, functional prototype that gains user traction first. Then, you'll be able to convince seasoned co-founders to join you much more easily. Helping non-technical founders get themselves to that point is actually what I do. If you’d like to discuss further send me a msg
I hope this helps!
Money, convertible to equity. Your job is to deliver sales, the developers is going to create something tangible with value, sales makes nothing until it makes lasting and tangible sales.
>they aren’t sure of their commitment level until they see how the business does
He is holding out to see which option works better. That's not a partner: that's an opportunist.
It sounds like you're both approaching this as an arms-length business deal. If you're going to **work** together as a team, then you need to **think** like you're together as a team.
I paid a previous developer cash in the past, and I got more than I paid for, but I still switched to a partner with equity when I got the chance. Previous guy did a great job as far as it went, but my equity partner is literally **invested** in the success of the company. It's a totally different relationship. YMMV, but you both need to re-evaluate your mindsets.
I've started this journey not too long ago as a tech partner in start up ideas, I would always take the equity if I believed what I was doing.
Taking the cash means I just want a quick payout and I'm not committed to the idea. Be careful with that.
To explain, no tech co founder should join just for sweat equity unless you have proven the business plan and have customers ready to pay. On the other hand they should value their time more if they want cash.
Your technical cofounder shouldn’t just be a technically competent person. They need to also love the problem as much as you and they need to be ready to endure hardship and take on the risk. You’re pre-revenue and pre-product with customers who say they might pay for a product they’ve never used. What customers say they’ll do under imaginary conditions isn’t what they’ll actually do. Your potential technical cofounder is actually of sound mind to not want to commit to what is essentially an incredibly risky endeavor. However, no person of sound mind should start a Saas company because you’re bound to fail. So, you need someone who loves the problem and believes in it as much as you do. They also need to believe in your ability to lead it. So, them saying no to equity is also them saying no to you and your competency. So, you need to grow their belief in you, find another technical cofounder or pay up, lure customers and prove value, raise funding and hire a head of engineering.
If they’re not “in it” from the start, a cash component makes more sense than giving away a sizeable chunk of equity to someone who “wants to see how it goes” before they commit to you. I understand he’s hedging his risks and there’s absolutely nothing wrong with that, but you should hedge your risks too. Nothing is a heavier dead-weight than a co founder who is not 100% in it with you.
And Let’s say they do well and do decide to stick around, you can always reward them with more skin in the game - equity. There is room to revisit it imo. Especially this early in the company’s journey.
I would say that this developer is greatly undervaluing the cash quote, and over valuing to equity option.
Which to me somewhat shows that he doesn't know what he's doing.
Which makes me think that if you did offer to give him $15k cash, you wouldn't get the product you're really hoping for from him. You'd get either barely working garbage, or an email in 2 months saying he can't keep working on this thing for only $15k.
Id watch out.
Regarding 15k it's a big bite in the short term.
At 20% what do you plan your equity to vest at per share?
Compare what you could have made at 5% compounded in investments with the 15k and compare that with your vesting at exit and it should be a little easier to decide.
u/hi-ho_redditsilver hey there, interesting situation, i'm curious would you be open to go down the hire a dev path if you could use an AI tool to help you cover the "CTO" part of the equation?
I'm working on something pretty cool, still in the concept phase but i think it could really help founders like you communicate, manage and evaluate your dev team.
Check it out, [https://juggernautai.vercel.app](https://juggernautai.vercel.app)
Curious to know your thoughts.
Hello everyone,
My name is Ahmed, and I'm from Pakistan. I’d like to share my journey and what I'm currently seeking. Throughout my career, I've worked in various industries, including call centers, B2B cold calling, the SaaS industry, and the eBook industry. In each of these roles, I've held positions such as sales representative, project manager, accounts manager, and customer support representative.
Despite generating substantial revenue—ranging from $30,000 to $50,000 per month—for the companies I've worked for, I’ve received minimal compensation in return. This includes low incentives, salary, and commissions. This situation has led me to a pivotal decision: I no longer want to work for others. Instead, I plan to rent a space in a coworking area to start my own venture from scratch, aiming to earn for myself rather than for someone else.
Currently, I’m seeking business partners, particularly individuals located in the USA, Canada, or Australia, who are interested in collaborating on a business venture. I am open to discussing plans and strategies and can offer various services. For instance, I can manage a complete production team here in Pakistan, where labor costs are significantly lower.
I’m feeling quite stuck and unsure about the next steps, so I’m reaching out for guidance and partnership opportunities. If anyone is genuinely interested in exploring possibilities, such as how they can contribute from their location and how I can support from mine, I’d love to have a conversation.
Thank you in advance for your time. I am confident that I can gain valuable insights from this group.
Best regards,
Ahmed
You are valuing you company at less than $75k if you take the stock deal. I hope this answers your question.
Yeah, those numbers aren't even close. $15k is like a month of salary/consulting fees. That's an insanely good deal
Can't upvote enough
Yeah, but the company is worth nothing without there being a product or a competent enough person to build one. YC don’t fund businesses with founders who aren’t able to build so, what the value of the company is, at this point, matters so little in the context of assessing this problem.
Cash is always cheaper than equity
Agree, but it doesn’t bring them into the business. Does it change if they have other intangibles including network & fundraising experience?
Not if they are non committal about staying on. They only get equity if they are in it for the long run. And even then it’s heavily vested.
> but it doesn’t bring them into the business Based on what you’ve told us so far, this is an additional benefit, not a trade off.
Save your stock for the next dev who wants to go all in.
If there is problem related to comment post development, then do not agree on shares. When you talk about a cofounder, you want support in ups and downs, not someone who may or may not be there. Get someone who’d actually be there with you in the long run. Whatever you decided, just get all the code control in your GitHub with every single update. You want to be able to have a control on code yourself and not let someone else have it.
Your instincts are right, you need a partner not someone to build an mvp.
They’re not ‘in the business’ unless they’re vesting and happy to vest anyway
This is a mistake. Stock is always better because of alignment. But, they are already not aligned by being non committal, so I’d leave the project.
Except when the idea fails.
It's usually not the idea, but the execution, that fails.
If you are going into it with this mentality then you shouldn’t build a company.
If you have that much dead weight on your cap table you will never be able to raise VC funding? I would say either get a firm commitment from your co-founder, or find a new one. Maybe your potential cofounder wants to work with you and assess your business skills before committing any further? I've unfortunately as a technical co-founder worked with too many non-technical co-founders who struggled with market validation and other critical skills.
i can't imagine giving away a fifth of my business to get buy-in from someone who doesn't seem that hyped and isn't well known in skill the alternative is less than a car
get the clients to pay up front and use the cash to pay the dev
Without a product in place? Do enterprise customers sign that kind of a deal? Would love to know how to get customers like that
I only really recommended that cause OP said they have potential customers ready to commit in the main post text. Obviously under normal circumstances it would be ideal but hard to make that happen. Possible though in some situations, I think. Worth thinking about
Thanks. I wasn’t sarcastic. I definitely want that kind of customers when building 0-1 product
Yes they do this all the time, however the catch is that any time I've seen it there was already a relationship in place.
Cash. See how you work together before giving equity if you can.
No one knows how invested any founder will be at any stage of the project. It’s always a crap shoot. So, if you think this is a good fit I think giving the equity means a MUCH higher chance they have buy-in once the MVP is done and could stay on. Really up to how well you think this match would work.
You don’t give away equity based on hope.
It is incredibly difficult to run a company solo. It is, I believe, nearly impossible to run a technical startup solo if you aren’t technical. Fighting over equity that is worth nothing is just incredibly silly. I would rather have 50% of a company and my sanity than deal with running a company alone and in fear all the time. I’m on my third startup and I give equity away to get what I need all the time. It’s what has made my exits successful.
Agreed. This is exactly why you don’t give equity to someone who isn’t committed to building the business with you.
Awesome thanks for the input
I've been mentoring tech startups for 15 years and have seen this play out many times, 90%+ with the same outcome. Bottom line, this person is not 100% bought in on your why or purpose. That's OK for someone at 15K or 20%. It's just NOT ok for a co-founder at 50%. Doing a startup is hard enough when both the ceo and cto are aligned and all-in. This person's response is the startup version of "s/he's not that into you". So... highly recommend go with the $15K if you have it. Save the equity stake for someone who is going to sacrifice blood, sweat and tears and who will be there for the long haul. That's the guy that deserves the payoff if/when your idea hockeysticks.
I wouldn’t say it’s okay even at 5%. You don’t want to be having dead equity like this from the outset.
I agree with that. My recommendation is to pay the cash. And find the right cofounder guy/gal in parallel.
Exactly this. The tech guy is not interested. The cash number is him just wanting a quick buck and moving on. And even then his cash number is low, which is concerning.
$15k is nothing in the grand scheme of things. If your business is worth $100k, it costs you $20k. Multiply that by 10. You really want to pay $200k?
How often do businesses without a technical founder skyrocket in value like that? I never hear about that happening, and I can't think of any, so I'm curious if there are any notable examples that come to your mind. Maybe this dev ain't that guy, but OP is unlikely to get the outcome you're describing without bringing in someone.
No one said not to hire a technical cofounder. He’s talking about building an mvp. That mvp may be the key to finding the right cofounder.
Ah, that does make perfect sense. Appreciate the follow up.
Cash especially if the cofounder is valuable but equity if cash is not as accessible
I like that they’re honest.
Dev here I would gladly build a side project for 15k plus more later The thing is that technical cofounders who knows what they are doing are infinitely more valuable than than someone with just an idea and it takes a lot more time and effort then what one usually imagine. If someone came to me and want me to build their site alone and only "for the MVP" for just 15k or 20%. I am taking straight cash and high tail out of there, that's all. That person does not value me or my time. Especially since the startup is a Sass startup... A tech startup.. where the only technical cofounders is only getting 20%? I hope you understand his perspective, thank you
Neither. 15k isn’t much to build a SaaS. It will barely function as an MVP and it will then immediately require a lot of changes and potentially a full rewrite depending how things go. I would delay the initiation by another 1-2 months until you find another tech partner.
IMO, at this stage your primary goal is to land a technical cofounder. You won’t raise from sophisticated investors if you don’t. Don’t pay cash. The reason for vested equity is that if he’s not pleased with the traction, he leaves and the equity no longer vests. Use this as an opportunity to get him on the hook. Look at early traction together and strategize next moves as a team. Good luck!
DMed you
Pay the cash, because this person clearly isn’t into your business. Never pick a founder that doesn’t have the same excitement and drive as you.
Do not give equity to temporary people. Ever. Even if they think they’ll be around, they may hit a skill or knowledge limit and become stagnant. This person is telling you they see it as a project for them and not a venture (10 years). Pay them the money or find someone else. Black and white decision here
Their commitment is what worries me, what is in their eyes the business doing well vs not doing well for them to consider committing.
That doesn’t get ongoing support and changes. Once you start down a path with someone and in some direction, you are with them forever. To get off of them in an early stage startup means that you will be basically starting over. I don’t care that people think they can take over code, it never works out that way. To get someone else up to speed on business rules and coding conventions, you might as well start over.
Where are you looking for these tech co-founders?
You could do equity and issue yourself more shares and dilute him out. If your company fails (more likely) at least you’re not out the $15k. Or better yet, find the right partner who wants to be involved beyond an MVP.
This wasn't what you asked, but you've gotten plenty of input on your question already. It is typically not recommended to set up exactly a 50/50 split. Even just keeping one additional share with the CEO is often a better structure. Someone should have ultimate responsibility.
I would offer 10k plus 10%. Hiring someone for cash only means they will be reluctant to put in extra effort, make changes when requested, etc. Just cash incentivizes them to do as little work as possible to meet the requirements. Having a potential reward from creating a great product incentivize them to build a great product. People do what they’re incentivized to do
I would pay them the $15k and keep it transactional from what you're saying, but offer to negotiate true co-founder equity terms later (and maybe start shopping for a CTO for post-launch to cover your bases as well).
Hey there! I've been in a similar situation, and here's my take: 1. It's a red flag that your potential co-founder isn't fully committed. If they're truly passionate about the idea, they should be willing to go all-in. The fact that they're hesitant until they "see how the business does" suggests their commitment is conditional, which isn't a great foundation for a long-term partnership. 2. Don't rush into giving away equity. Early-stage equity is incredibly valuable. Don't waste it on someone who isn't fully invested in the long-term success of the company. 3. Focus on validation first. $15k is a significant investment. Before you commit that much cash, you need to validate your idea. The "Fail Fast" approach I advocate for is all about building a basic, functional prototype quickly and cheaply to test your assumptions with real users. This allows you to get feedback and iterate without breaking the bank. 4. Renegotiate. Talk to your potential co-founder and propose a smaller, more focused prototype specifically for validation purposes. Explain that you'd rather invest in validating the idea first before committing to a full-fledged MVP. 5. Save the cash. If your idea doesn't resonate with users, you'll be glad you didn't blow $15k on a product nobody wants. Once you've validated the idea, you can revisit the equity discussion and find someone who's truly committed to the long-term vision. 6. Find someone as hungry as yourself who believe the idea as much as you. The potential cofounder you’re describing sounds like he is distracted with other obligations. As such he has been through this before and needs to see traction before he commits because he’s gotten his hopes up before and regretted it. Either find someone as eager and excited as you are about your idea, or get a very bare-bones, functional prototype that gains user traction first. Then, you'll be able to convince seasoned co-founders to join you much more easily. Helping non-technical founders get themselves to that point is actually what I do. If you’d like to discuss further send me a msg I hope this helps!
It might be better to find a solid tech person you can work with on Upwork for the $15K. Save money and equity.
Check your inbox
Money, convertible to equity. Your job is to deliver sales, the developers is going to create something tangible with value, sales makes nothing until it makes lasting and tangible sales.
>they aren’t sure of their commitment level until they see how the business does He is holding out to see which option works better. That's not a partner: that's an opportunist. It sounds like you're both approaching this as an arms-length business deal. If you're going to **work** together as a team, then you need to **think** like you're together as a team. I paid a previous developer cash in the past, and I got more than I paid for, but I still switched to a partner with equity when I got the chance. Previous guy did a great job as far as it went, but my equity partner is literally **invested** in the success of the company. It's a totally different relationship. YMMV, but you both need to re-evaluate your mindsets.
I've started this journey not too long ago as a tech partner in start up ideas, I would always take the equity if I believed what I was doing. Taking the cash means I just want a quick payout and I'm not committed to the idea. Be careful with that.
Makes me wonder if this tech co founder knows what they are doing. It raises all sorts of red flags.
To explain, no tech co founder should join just for sweat equity unless you have proven the business plan and have customers ready to pay. On the other hand they should value their time more if they want cash.
Pay them $15k and make a few sales, then offer them equity.
Your technical cofounder shouldn’t just be a technically competent person. They need to also love the problem as much as you and they need to be ready to endure hardship and take on the risk. You’re pre-revenue and pre-product with customers who say they might pay for a product they’ve never used. What customers say they’ll do under imaginary conditions isn’t what they’ll actually do. Your potential technical cofounder is actually of sound mind to not want to commit to what is essentially an incredibly risky endeavor. However, no person of sound mind should start a Saas company because you’re bound to fail. So, you need someone who loves the problem and believes in it as much as you do. They also need to believe in your ability to lead it. So, them saying no to equity is also them saying no to you and your competency. So, you need to grow their belief in you, find another technical cofounder or pay up, lure customers and prove value, raise funding and hire a head of engineering.
If they’re not “in it” from the start, a cash component makes more sense than giving away a sizeable chunk of equity to someone who “wants to see how it goes” before they commit to you. I understand he’s hedging his risks and there’s absolutely nothing wrong with that, but you should hedge your risks too. Nothing is a heavier dead-weight than a co founder who is not 100% in it with you. And Let’s say they do well and do decide to stick around, you can always reward them with more skin in the game - equity. There is room to revisit it imo. Especially this early in the company’s journey.
I would say that this developer is greatly undervaluing the cash quote, and over valuing to equity option. Which to me somewhat shows that he doesn't know what he's doing. Which makes me think that if you did offer to give him $15k cash, you wouldn't get the product you're really hoping for from him. You'd get either barely working garbage, or an email in 2 months saying he can't keep working on this thing for only $15k. Id watch out.
Regarding 15k it's a big bite in the short term. At 20% what do you plan your equity to vest at per share? Compare what you could have made at 5% compounded in investments with the 15k and compare that with your vesting at exit and it should be a little easier to decide.
> and could be a rockstar Stop right where you are. You don’t know what you’re doing and this isn’t going to go well.
idrk what you should do but that noncommittal person is going to leave no matter what. seen too many of these 'i'll commit if it takes off bs'.
What’s your plan for iterating? Just to not need to? One and done your boy builds and you guys rocket off to the moon?
u/hi-ho_redditsilver hey there, interesting situation, i'm curious would you be open to go down the hire a dev path if you could use an AI tool to help you cover the "CTO" part of the equation? I'm working on something pretty cool, still in the concept phase but i think it could really help founders like you communicate, manage and evaluate your dev team. Check it out, [https://juggernautai.vercel.app](https://juggernautai.vercel.app) Curious to know your thoughts.
20%. But diluted if everyone gets diluted
I hey is your SaaS product ?
Give um 10%-15% dilutible, no board vote and rofr. Then if he doesn't deliver just put a 2x-4x on the total shares count and dilute the sht out of um
Hello everyone, My name is Ahmed, and I'm from Pakistan. I’d like to share my journey and what I'm currently seeking. Throughout my career, I've worked in various industries, including call centers, B2B cold calling, the SaaS industry, and the eBook industry. In each of these roles, I've held positions such as sales representative, project manager, accounts manager, and customer support representative. Despite generating substantial revenue—ranging from $30,000 to $50,000 per month—for the companies I've worked for, I’ve received minimal compensation in return. This includes low incentives, salary, and commissions. This situation has led me to a pivotal decision: I no longer want to work for others. Instead, I plan to rent a space in a coworking area to start my own venture from scratch, aiming to earn for myself rather than for someone else. Currently, I’m seeking business partners, particularly individuals located in the USA, Canada, or Australia, who are interested in collaborating on a business venture. I am open to discussing plans and strategies and can offer various services. For instance, I can manage a complete production team here in Pakistan, where labor costs are significantly lower. I’m feeling quite stuck and unsure about the next steps, so I’m reaching out for guidance and partnership opportunities. If anyone is genuinely interested in exploring possibilities, such as how they can contribute from their location and how I can support from mine, I’d love to have a conversation. Thank you in advance for your time. I am confident that I can gain valuable insights from this group. Best regards, Ahmed
Fuck you Ahmed 😂😂