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Compensation: How much equity should I give an engineer who I'm asking to join my company as a co-founder? (He'll be receiving a salary, too, and I'm self-funding)
JC
JC
Jason Cohen, Founder at WP Engine answered:

Unless there's a strong imbalance in contribution to the company's success or finances, it's usually best to split equity evenly.

In this case there is in fact an imbalance in finance -- he needs a "full salary," which is the *opposite* of what a co-founder generally does with a new business, *especially* with a tech co-founder.

To me, this is not a co-founder, this is employee #1.

To see why, ask this: What is the risk this person is taking in joining the company? He's making a normal salary and can get another job if it doesn't work out.

If the risk is the same as an early employee, this is an employee -- maybe a KEY employee -- and should be treated that way.

I would say 10% sounds good especially if you'll need to take money later.

Put yet another way, this is just a contractor building the MVP for you.

Here's an article of mine with more of a math formula for this question if that's more helpful: http://blog.asmartbear.com/cash-equity-compensation.html

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