I’m bringing in a co founder for my training business which is 8years old and running profitably. I’m bringing in the person with the relevant experience so we can grow much more. I’m wondering what percentage of my business could I share with this person?
How much to share with cofounder
Comments
Shyam Sunder Vyas
Why are you bringing this person on board? Surely to add value.
You say your business is now 8 years old. How does that make this person a co-founder?
If I read between the lines, I feel you are trying to have this person as a partner, but do not fully trust.
Whatever the case maybe, i.e. the person may be willing to go with you in the long run or the intention could be what you fear. If you are not comfortable, abort.
Because your discomfort and doubt will any how affect things in future.
Ashwani Gaur
The percentage share is proportional to whatever value he/she bringing into your business. That only you both can decide.
I have a suggestion to keep the percentage vasted for minimum 3 years, so that you get covered for any kind of conflict happens in next couple of years.
Arun Kumar Waghchoure
You can try out https://foundrs.com/, but I don’t recommend it as there might still be dissatisfaction in your founding team.
In another example there have been few startups who had tentatively listed percentage and only after 5 years of lasting relationship all the partners will be confirmed on the percentage, thus every year they will have to go through performance review to maintain their score card.
Best speak openly heart to heart.
Krishna Varma
Dear Savitha,
The person joining your business cannot be tagged as co-founder unless you are introducing a new name for your firm.
However often confusion prevails with reference to keeping the satisfaction component high when a new person moves in to a key role, ignoring the crucial fact of fitment in to the culture and value system of the firm.
I have experienced twice similar hindrances and failed both the times. But right now doing another attempt.
Best option will be to offer the person key role with financial commitment and a percentage on the business brought in for the first two quarters and take the equation to next stage by committing a 10-15% of the stake (depending on the business done in two quarters), you may also consider revising the money/take home plus allowances/perks.
No matter how well you know this person working towards a common goal in a team, you will learn a lot about the person. Give it time to grow gradually.
All the best.
Cheers
Krishna Varma
Arun Kumar Waghchoure
Hello Savitha, here is my new change-of-heart answer many including me are giving you lot of corporate or MBAish answer.
Go for 50-50, sharing, consider your business as a family, if you have two kids in family you don’t consider to give more benefits to your elder kid and less to your younger kid just because he is late to join your family and is still immature and have less skills.
Follow Google’s Mantra – Be fair, don’t be evil.