I am Sachin non-technical business professional who has this awesome, fully validated online app concept involving games. I have been on the lookout for a very good and experienced outsource contractor or agency whom I can give this project. But some of my friends from the tech industry suggested that it’s better to get like minded technical people on board as Co-founders. Be it a company or individuals. That won’t matter much.
So after much deliberation and digging around I have managed to come across a IT services company run by TWO IITian friends. Like everyone else, they just loved the idea and I loved the fact that they were both from IIT (gives my future investors a big reason to smile and pump in cash). They have shown interest to become my partners. They will put a few of their existing resources (in their current services company) on the job for this app is and the development will be done on actual cost.
My question is:
1. Should I get them on the board as my co-founders or I offer them a work for contract now and decide about the Equity participation post the MVP development.
2. If I get them on the board then how much equity should I give to each (considering the fact that they are very old friends, their combined equity can’t be more than me).
I have lived my product idea for 3 years, perfected it, got it validated and have also got great feedback from people around. I need to have the majority Shareholding even though I will be dependent on a technical team. I do respect their credentials and work experience. They are senior to me (must be in mid 40). Their Educational Institution holds weight. But as I said earlier, they are the ones who loved my idea and showed interest to join the venture. They will keep doing their existing Services business…Till this becomes a bigger success than that.
Need help guys.
Equity or Contract?
If Equity, how much? Please give reasons.