Non-Paid Employee #1 Co-Founder Title?

Nate Legler
2 replies
So this is a bit of a wild question. I have built with some help from contractors a functioning MVP. Have brought on the first 6 companies and the first 350 users for giving it a good test. Collecting the feedback and making necessary changes. I'm looking at bringing on someone else to handle more of the Marketing/Communication side. I enjoy the behind the scenes stuff like building, talking with companies, etc. Not so much talking to media or that type of stuff. There is someone who she is a rockstar at her current job that is in the market that this project is in. I'm wanting to ask her if she would be interested in coming on to help with the more outward stuff. I wouldn't be asking her to quite her full time job because the project is pre-revenue for now. I also want to make her feel just as much as the beginning team as possible so was wanting to give her a Co-Founder title and some equity (that would vest). I've been in contact with her since I started asking for some helpful tips on certain things and she is great. So the question is should I reward her with the co-founder title and how much equity if she does decide to help with this?


Matthew Johnson
If she is joining this early, and for no salary then she certainly sounds like a co-founder to me. If it was me I would split things 50/50 or as close to that as possible. I feel like founders in this situation over-index on the past and under-index on the future. In 5 years will it matter that you brought the first 6 companies or 350 users? Maybe a little, but not nearly as much as what she will have hopefully helped you accomplish since she joined. How is she going to feel over those years putting in as much time and effort as you, but having significantly less equity? Will she want to stick around in that case, or will that have a negative impact on how she feels about her role? It's better to own a smaller piece of a larger pie than owning a large piece of a small pie. Is she going to make the pie larger? Then share it equally. Finally, investors will also probably want to see a closer equity split. I know YC and other VCs see large differences in equity among cofounders as a red flag.
Nate Legler
@mattcrail thanks for this reply. To be honest she for sure would be a co-founder in my eyes. Want to do some follow up points that maybe you could help answer? 1- She doesn't have the financial resources to contribute to funding this project since she is fresh out of school, life and what not. All of this is coming on my end. 2- There is no plan to go into YC or VC at this time or really in the future. Bootstrapping and once we get to revenue being able to keep it running that way. 3- She won't be fully invested timewise as I mentioned. She is going to stay at her full-time job and work on this during her free-time. The plan is to pay her as soon as we do reach cash flow 4- I won't be taking any payment/salary from this. 5- I should have included that 6 companies is the current batch with another 20 others on the waitlist. There is only about 30 total target companies in the space we are in.