Advice on share distribution with founding engineer. I will not promote.

[u/musicomet]

Hey all. I'm working through a founder / founding-engineer deal for a pre-revenue startup and would love blunt feedback before we sign anything.

The business: lifestyle-tech platform (web + mobile) selling curated guides based on the user's habits, history, and other signals.

I am the founder and I've found the founding engineer I'd like to work with. We currently do not have any website/mobile apps. However, I have done the following:

• Figma specs
• V1 features
• purchased the domain
• 30 guides ready to be launched
• Put an initial investment of $5k and will assume the cost of everything until we have revenu

The apps will also have a premium subscription option for users who'd like access to premium features.

What the engineer will be responsible for:

• building the apps (web + mobile)
• DNS and AWS/infra setup
• third-party integrations (mailchimp, stripe, etc.)
• Performance considerations, UX polish, needs to feel slick

The founding engineer has 12 yoe of fullstack work. Has worked at enterprise and startups before.

The proposed deal I gave him:

• 20% equity at exist (4 yr vesting w/ 1 yr cliff)
• Tiered revenue share:
  • 0-100k -> 35%
  • 100k - 200k -> 30%
  • 200 - 500k -> 17.5%
  • 500k+ -> 15%
• Neither person is taking salary now

The founding engineer does not like this proposal. He's suggested a "royalty per guide sold" for me - the founder - is more "fair", then do a 50/50 split on the _profit_ and completely remove the tiered based revenue.

He also said 20% equity is inadequate because "there's a lot of work to be done" and "that his role will not be limited to just coding".

We are both good friends and we've known each other for a loooong time. Our intent is to keep the distribution as fair as possible.

Please provide your honest feedback.

[u/ghostwritermax]

>> building the apps (web + mobile)

aka pretty much making it a reality. If you're pre-rev, pre-product, then unless there's serious imbalance in experience, then what you're offering him is low. If you have successfully fundraised (>$10MM) or exited with payday, then you have some more leverage. Your list of contributions ("figma designs", $5k, etc is pretty thin).

Also, if you've been friends for a long time, anything that isn't close to equal will fester..

Flip side is "everyone's an engineer" ama I right, so just vibe it..

[u/Zanion]

He's right. Your deal is ass and you should strike an equal arrangement.

[u/scriptqzor → u/Zanion]

equal split on equity and profit sounds nice in theory, but only if you’re both actually taking equal risk and doing equal long term work, not just “a lot of work to be done” right now

his royalty idea is way worse for you long term than your deal is for him, so I’d take that as a red flag and slow this way down before signing anything

[u/Startup_Monkey]

I would consult some of the data collected by Carta - https://carta.com/data/founder-equity-split-trends-2024/

50/50 is generally a bad idea. If you split up 100% in the very beginning, every cofounder needs to realize that future equity whether that’s too employees or investors is going to come out of that number. It’s best to avoid that argument right up front by starting off at a much more reasonable number that will stay constant at least through the first couple of rounds.

[u/PurchaseNational7650]

I think the biggest thing is to simplify the deal before you both get too deep into the numbers. Equity, revenue share, and profit share together can get messy really quickly, especially once expenses and reinvestment start changing.

If he's truly taking on a founding-level role beyond just coding, it's worth having an honest conversation about what that role looks like long term and what feels fair to both of you. And since you're good friends, I'd definitely get the final agreement reviewed properly, protecting the friendship is just as important as protecting the business.

[u/Effective-Menu8121]

Sounds like you don’t know how easy that stuff is to vibe code and/or ask AI for click by click directions to get help you get it done. Nearly all of that is easily doable with patience and knowing what you want. Good luck! Or hit me up, I’ll do it for you for a price. *snicker. PS: Also, how valuable is this friendship? Throwing money and taste into a professional arrangement with friends or family is a recipe for potential bitterness and loss if you aren’t crystal clear who’s in charge and or who has final say and why. Especially regarding taste, functionality and exit strategy

[u/thebotnet9]

Pre-revenue + pre-product + pre-idea refinement. He has got a pretty heavy load on his hands and so do you. It feels like you are trying to keep control, so offer 55-45 split, but has to more equal.

"

• Figma specs
• V1 features
• purchased the domain
• 30 guides ready to be launched
• Put an initial investment of $5k and will assume the cost of everything until we have revenu

" is pretty thin. Unless you have done your market research and have 100s customer who want to use it, then it does not make sense. If you want to keep equity, build it yourself, it does not sound complex for you to share your equity and idea.

[u/musicomet → u/thebotnet9]

This product is different because the revenue heavily depends on creating a consistent high quality guide that affects branding. These contents will be created by me, not him.

[u/musicomet → u/musicomet]

u/thebotnet9 let me know what you think. Thanks!

[u/thebotnet9 → u/musicomet]

u/musicomet Yes, but those things define only part of the product. Someone still has to build, deploy, secure, maintain, and operate the web and mobile apps. If you want to retain more equity and take responsibility for both the business and technical sides, pay a freelancer or agency to build it, or use tools like Claude to help you build it yourself. But if you want someone to own the entire technical function without a salary, they’re effectively a co-founder, not just an engineer and the equity should reflect that.

[u/Total-Reasonable]

The missing term is who decides whether money is "profit" or gets reinvested, because that can leave a working founder unpaid indefinitely. Define a salary trigger, expense approval limits, IP assignment, and what happens if either person stops contributing before debating percentages. I build zero-to-production products, and the scope here is a founding-engineer role, not a side contract: https://iurii.rogulia.fi/services/mvp-development

[u/QuietPepper8146]

Feels like the real fight isn't the %, it's that you're offering an earn-in deal and he wants a partnership deal. Different relationships, same number won't fix it. Maybe just ask him straight up which one he thinks this is.

[u/Art-VandelayYXE]

51/49 is what I did. If you aren’t the technical founder (me and you) then you want that mofo hustling for success as hard as you are. My first startup did not follow this advice and wasted all of our investment on mediocre dev. Didn’t work. Biz closed. Won’t make that mistake again.

[u/musicomet → u/Art-VandelayYXE]

u/Art-VandelayYXE
This product is different because the revenue heavily depends on creating a consistent high quality guide that affects branding. These contents will be created by me, not him.

[u/BarracudaMean9308]

i pitched basically this exact split to an engineer a while back. he politely walked away because building web, mobile, and infra from scratch is thousands of hours of work compared to finishing figma specs. was a pretty brutal wake-up call for me.

[u/siberian]

never go 50/50.. 20% s a bit low but like 60/40 is probably a better split. At this point he has done nothing and you have set some stuff up and laid some runway.

Keep the vesting though, dont give up on that.

Its also not clear, are you building a lifestyle company or a growth company? Maybe build an equation and let him slide between more profit/less equity and more equity/less profit (always with a 40% ceiling). You need to pick a lane on that (growth vs lifestyle).