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What's the Right way for cofounders to share in a business they are building? - Business - Nairaland

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What's the Right way for cofounders to share in a business they are building? by Efeman1: 12:19pm On Dec 10, 2021
I found that what motivates the share ratio of any start-up for me is the level of commitment and sacrifices given to the advancement of the business and brand in general and not necessarily the resources. I have been having a problem with this founder friend of mine over a brand we are building together who wants more shares of the business because he suggested the idea, even though ii have given more resources and value to the business technically. He may argue otherwise though. But I don't really care. The point is, we saw a potential and are chasing it together with all we have got, why should one now want more shares when we didn't discuss resources and share ratio from start?

we are both carefully avoiding the issue of who has brought in more resources. For me, that is because I don't want to steer up bad energy that will kill the vibes needed to push through the endless challenges the Nigerian business stage has for every business, not to mention startups with thin legs that can barely withstand the many huddles that there are.

Now I want to drag him into a finale. Don't want to spell out his arguments as that would take us off course. But I will like to learn from the community what it was like for paystack in particular. what were their founder's shares? does anyone know if it was 50 -50? Did it at any time change in the ratios or did it remain fixed till they sold out to strip.

I know that Nike cofounders had it 50 - 50. but I don't know much about other co-founders so I thought to get an opinion poll here and learn of others. So kindly share your knowledge of any big co-founded business that you know, especially in the area of their founder's shares.

Thanks.

PS, i am still making my research. Twill be nice to have easier with insights from here.
Re: What's the Right way for cofounders to share in a business they are building? by Tkingg(m): 1:44pm On Dec 10, 2021
Hmmm

Sharing equity is one of the problem of business or startup anywhere.

The mistake you made is not sharing it at the beginning, I doubt you even have partnership deed or cap table.

To best of my experience, you can't share equity 50:50, it is bad, there will be no boss; some one that will have the final say.

To share equity consider below point

CEO will have between 20% to 40% equity more than others.

Why

Startup CEO is a tough job, it will drain the person physically and spiritually.

If it is a tech startup, After CEO tech cofounder equity should be more than the others.

Why

Talented Techys are hard to combine

In short

Equity should be shared according to the task expected of the founder

Equity should be shared according to how hard to replace the founder

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Re: What's the Right way for cofounders to share in a business they are building? by Efeman1: 2:16pm On Dec 10, 2021
Hmmm... This matter is tiresome.

Problem is, at the start of an idea, everyone is excited. No one wants to sit down to plan out all the variables and administer roles and responsibilities. Everyone puts in all they have got. Then it begins to make sense. All of a sudden, everyone feels they are the hero that made things work out fine thus far.

I think I will have to settle all and call for deeds to be done.

Question I will like to ask is; what if the business is a project in phases. Such that initial stages will be demanding on founder A. And advance stages on founder B? 20% seem a wide margin if things escalated as we hope to a robust brand.

Besides I still am yet to find out what was the ratio between the paystack guys. These kind of information is hard to find on the internet.

Tkingg:
Hmmm

Sharing equity is one of the problem of business or startup anywhere.

The mistake you made is not sharing it at the beginning, I doubt you even have partnership deed or cap table.

To best of my experience, you can't share equity 50:50, it is bad, there will be no boss; some one that will have the final say.

To share equity consider below point

CEO will have between 20% to 40% equity more than others.

Why

Startup CEO is a tough job, it will drain the person physically and spiritually.

If it is a tech startup, After CEO tech cofounder equity should be more than the others.

Why

Talented Techys are hard to combine

In short

Equity should be shared according to the task expected of the founder

Equity should be shared according to how hard to replace the founder
Re: What's the Right way for cofounders to share in a business they are building? by cherryCola: 2:52pm On Dec 10, 2021
The one with more funding should
Hold more shares of the company,
Who brought the business idea does not really matters here.

After all Steve jobs was fired from
Is very own company "by the CEO he hired."

Mynd44, lalasticlala, Dominique
Pls move this to the promise Land
For more views.
Thanks in advance.

1 Like

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