Hi. A friend of mine recently won a hackathon with 2 more people. They won a cash prize redeemable only to fund a company, which they intend to do. They also got approached by an incubator and are preparing a pitch to compete with other startups.
Initially they decided to divide the equity 1/3 each. However one of the co-founders decided he wants either 50% (to run the company) or 10% (to be an advisor and not do much). He said the output of this decision will affect his participation for the initial presentation to the incubator.
This cofounder is non-tech with a business background, no past professional experience but lots of charisma. My friend is mostly tech, no past experience either but knows devops, cloud services, data science and webdev. The company would require mostly business negotiations and logistics at the beginning (mostly about how to handle large quantities of stock to dropship), and eventually move to a more tech product oriented phase with a website or app that would require the technologies my friend knows about.
Neither my friend nor I have enough entrepreneurship experience to see how to proceed without this biting her ass in the future. Any advice? Thanks in advance.
They all initially agreed to 1/3 split. Tell him if that’s not enough he can walk and they’re not giving up their equity.
Businessmen can be easily replaced; if you put it out that you need a hype man / business guy for an app and offer equity, you’ll get a thousand people wanting it. There are way more business minded people that want free tech talent and a product to sell than the other way around.