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Share redistribution

I am a solo founder, my shares are distributed 999-1, the 1 going to family just because I needed two directors.

I realized that I needed a partner. After 3 years, found a guy who fits what I am looking for.

What will be a fair share compensation for him? How do I work out the redistribution of shares? Investors have begun approaching our company and it’s visible in the market after those 3 years of work.

  • Partner does not mean anything in almost many types of startups. In startup, there are co-founders, early employees,…. You may call an investor, a partner.
    The number is 50% if your goal is to startup, for one co-founder, and %33.3 for two, no matter how much you work. Because co-founders as a team would generate 1000 results along the way more than whatever you have now (unless you have a flying car prototype).
    The game of not 50%-50% does not really work in startup (again for co-founders). It only works in business or partnership (such as law or investment firms). Its very clear what partners bring to the table in those partnership situation as they are experienced/professionals. In startup, partner is like a boy/girlfriend (means most probably there is a breakup). Co-founder is like a wife/husband. and of-course there is divorce there, but you may also get a baby or a dog, not just your love letters back. So the reality is ….
    It seems you may be a business man. So partner stock calc is simple. check out what s/he brings in the table for how long. Do your valuation calc. Then you can do net present value, and estimate the future value and play the finance game.
    To me you sound like you have found your first employee.
    Anyway, find out what you are doing before bringing anyone in.
    Investor approach your company also does not mean anything. If you have a 6-digits check from an investor, that may mean something if the first number is at least 2 or 3.
    The data you have also provided in your message is pretty limited. So its pretty hard to say what you are into.
    Keep going & good luck!

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  • adding to the comment above: consider vesting. so depending on how much the person brings to the table that the start w/ a certain percentage and then according to criteria which you define together upfront (milestones, time, development contribution, sales) hand over the rest of percentage – take enough time for the vesting that you are able to check if the person is really behaving as a partner.

    from a salary stand point define a salary for “full time” and then pay that to both of you. your company seems to run well now, but also consider a method on how / when you would skip your salary in tough times.

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