What is the fair % to give to a new CTO/web developer entering in the company after 2 years the company has been incorporated (no revenue) ?

You might be somewhat in trouble. You'll want to consult a lawyer, not to be adversarial, but rather to ensure you do things that are legal and are best from a tax-consequence perspective. You can't back-date option grants or stock grants, for example. There are recent scandals reinforcing that statement. And if you don't back-date, your stock (or options) is worth something now, and might even have to get a 409A to ensure it's valued properly. (That's a 3rd-party stock valuation report, typically costs $10k-$30k, which companies with ESOPs are required by law to do annually, but I wouldn't be surprised if this company hasn't yet.) There's all sort of other boogers which you couldn't even know about. For example, if an outside party made an informal written offer to buy the company, even if it went nowhere after that, that will change the 409A valuation. So this is why, in short, I'm giving you the unsatisfactory answer that you'll have to use a lawyer to make sure everything is done properly. This is, sadly, a object lesson in getting paperwork done properly from the start. I'm sorry to be the bearer of bad news!

If they are offering equity as your payment then I'm surprised that they didn't come with a number. Or maybe they will. It's hard to give a firm answer because it all depends on how much money the two founders are investing on their own. If you say you'll invest equal portions then you can ask for 1/3 of the company. If you're just investing time, how much time, compared to how much of their time plus equity. Depending on those answers, the amount of equity you're worth can drop pretty low.

Some questions you'll want to answer before moving ahead: How strongly do you believe this idea can become a successful product? Why do you think they approached you? How comfortable do you feel running a company owned by someone else? What happened in your previous CEO role? What confidence level do you have in the founders? I personally wouldn't take on such a role, because there's no way I would ever run a company I didn't own. Too much blood, sweat and tears need to be put in for the return of a salaried payoff. I know you're asking about equity but are they even open to giving you some? Around 20% is the minimum, one-third feels right. They're never going to give you more unless they are crazy or totally inexperienced. And they are probably going to want to keep some aside for the CTO. You do not want a failure under your belt so make sure this is a winner before you consider taking it on. The fact that they don't have a viable product with customers already sold to concerns me greatly.

You could: 1. make a connection between per project and equity allocation - so each time they complete a project, they get a small % of equity. Research has shown that people prefer small payouts than one big payout at the end (ppl can't postpone their desires...). 2. Keep them involved in the decision loop and share with them small successes. Make them feel part of the company/business. 3. Give out additional 'bonuses' for projects done well or for milestones achieved by the company. 4. If you have the capital/money to support it, then make it clear that they can exchange their equity for money - if a company is willing to buy back it's equity, this shows that the equity has value - which will make them want to keep it. The only challenge with this last option is that if you do buy back shares, it creates a tax event for both sides which isn't always advised. There are a few additional options. I've successfully helped over 300 entrepreneurs and would be happy to help you. After scheduling a call, be sure to please send me some background information so that I can prepare before - thus giving you maximum value for your money during the call itself.

Good Morning, Your question may appear to be a simple one. As a CPA, CGMA, and business performance expert for over 25 years now, I get questions like this from my clients often. Your options are not clear from your question, however, I will steer to you to where you need to look to determine what options are available to you: 1) Your company structure will determine some of your options. This means are you a Corp (C corp or S corp), LLC, partnership/multi-member LLC. Due to the 10% held by others, I'm sure your not a sole proprietor. 2) Any operating agreement you may have will also define more of your options. Operating agreements can hold many terms of how you operate your company, including ownership changes, so I cannot give you any advice here without knowing if you have one and what's in it, but the contents will flush out more options. 3) In the absence of an operating agreement (this is always possible) you may need to take "politically and legally prudent" steps. That means you'll need to work out any sale of your stake with your fellow partners. 4) Once you've flushed out your options available to you, you can then set the steps you need to take. 5) Your steps will need resources to help you. Business resources such as guidance on the sound business steps to take, and negotiations to conduct, while keeping your business rolling, as well as legal resources to put any agreements on paper. Because this is complex, by legal and business measures, I encourage you to call me for more accurate information to help you. I hope this helps!