I started a marketing company 4 months ago focused on helping brands to connect with influencers internationally. I had no employees. My two friends who have full time job saw what I was doing and thought the idea was interesting. They helped me out couple of times (few hours each time) for the past month. During that period, I keep inviting them to join me in the venture, but they expressed high interest but didn't make the moves. (Background on my friends: One of my friend is good at customer relationships - sales, the other has got a entrepreneurial personality but little domain knowledge.) And just today, we won a annual contract from a major brand which is worth ~160k/year and another 2 in the pipeline. If they join me now, what should I consider them as? Should I pay them market salary and give me stock options? Or should I allow them to buy in at a valuations? Or should they still be the cofounders, sub-market salary and have shares vested? Please let me know what you guys think :) Thanks
That entirely depends on what feels right to you.
If you are going the shares route, I like this model, as it is fairly intuitive:
You of course need to have a valuation for your company in order to determine the amount of outstanding shares though, and you can do that in multiple ways, but this may help:
http://venturehacks.com/articles/seed-valuation
But realistically, you need to do what feels right to you.
I'm happy to discuss with you further.
Answered 9 years ago
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