Questions

CPO brings considerable industry experience and pedigree to the table. Startup has 2 founders and just closed Series A a few months ago.

Hi
There are various 'models' that you can use to estimate how many shares/percentages your new partner should get. These include (a) his/her investment in time and/or money, (b) the current + potential value of the company, (c) the time and/or money that you as the original founder already put in and various other models. That said, at the end of the day, it's all about value and psychology (both side's feelings).

Bottom line:
1. It all really depends on how much value they are giving you (not only financial, sometimes even just moral support goes a long way). Some founder's 'should' get 5%, some should get 50% or more.
2. Ask the potential partner how much shares they want (BEFORE you name a number).
3. Have an open conversation with them in regards to each of your expectations.
4. Use a vesting (or preferably reverse vesting) mechanism - meaning that the founder receives his shares gradually, based on the time that goes by (during which he fulfills his obligations) and/or milestones reached.
5. If you want a mathematical method: calculate the value of each 1% of the shares (based on the last investment round), check how much an average CPO earns per month/year, and then you can calculate what % he/she should get for the 2-3 years they should put in.

I've successfully helped over 350 entrepreneurs, startups and businesses, and I would be happy to help you. After scheduling a call, please send me some background information so that I can prepare in advance - thus giving you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/assafben-david


Answered 4 years ago

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