Questions

I'm considering a partner who would bring technical expertise to my SaaS product. He began work after we discussed 30%, now that he is months in, we both want to firm up the partnership, yet he suggested now he wants 40%. I had the initial idea, designed the product in full, have existing customers for an early version of the software, I do all the marketing, have developed strategic relationships, have won two grants, done considerable work on funding, have substantial recognition, and have incurred ALL expenses to date. I feel that 40% is too much for a CTO to build the software, am I off the mark? One tool I've used to calculate fair equity was this: http://foundrs.com, and it suggested 23%.

Yeah for what you have mentioned it seems 30% is more than enough.
Now it is also important to keep in mind how important is technology going forward. If your business is totally tech dependent for example ad-tech or artitifical-intelligence then 40% is good. But if your business has considerable amount of offline work for example ecommerce, getting vendors and partners on platform then 30% is more than enough.
Finally if you are going to be CEO and other guy is CTO and he gels well with you and works with complete alignment of goal then you can consider giving him 40%. Its pretty hard to find awesome tech guys these days. And more than that if he realizes to work with you as per your plans then its very very helpful.
We can also chat in detail if you want.


Answered 4 years ago

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