Show HN: I wrote a co-founder equity calculator over the weekend

Elaborate?

"Who pitches investors" should probably be checkboxes, not radio buttons.

The quality of comments on HN seems to be falling pretty quickly.

It's a good idea. I think technical founders are probably a little underrated in your model.

Otherwise, I don't know if equity calculators are a great solution in general. They just tend to shift the problem from the importance startuppers give to different topics to the importance a program gives to these topics. On top of that, discussing non-round amounts >10% (such as 19%, 23%, etc.) just gives much too much importance to a few %, which paradoxically makes discussions tougher down the road. Better to round things up (70/20/10, 60/40) and just leave things at that.

I have been running my startup for a little over 2 years now (bootstrapped). After inputting my constraints/situation to the simulation, it was pretty much spot on. I definitely wouldn't argue with what the numbers showed up as :)

Mostly accurate for me.

I've been talking to two developers about joining a bootstrapped startup I've been working on... I'm full-time, MVP is 80% of the way, and its in a space where I have domain expertise, industry connections, and fundraising contacts.

Anyway, long story short, it was spot on with respect to the split between me and 1 technical co-founder, but sort of missed fact that there's diminishing return for adding a second somewhat overlapping person.

Also, it doesn't handle the case where different people are working in different proportions (some full-time, some heavy part-time, some light part-time). Would be useful to have the ability to create a timeline to reflect how many hours per week people will be working and when they would go full-time. If you really wanted to go nuts, you could add in some modeling to account for people who may work way below their market value, and how long that would go on for.

Good effort, overall.

I actually came into this situation with my current startup. My partner had the MVP built by contractors before I came on. He is completely BD/sales, but he had a close advisor who helped him get the product built.

Honestly, this is kind of a nuanced situation. First of all, it depends how long the first guy has been working on the project, and whether he was doing it full-time or on the side. Also, it depends on whether the MVP has product/market fit, or whether it needs to pivot and be re-built before it is really what the customers want.

Overall, without knowing what weights this "calculator" assigns to various variables, it is pretty much useless. Also, as much as technical founders want a formula for everything, equity split comes down to a negotiation (especially if founders come on at different times).

Thanks, you are of course correct. No one in their right mind would blindly say "the calculator says you should get 23% of equity, that's what you'll get".

Rather, it's a way to start asking questions among founders: "how come, if I use this calculator, John gets so much? I thought he wasn't that important, let me try to understand what is going on."

Same here (running IE6 at work).

I am assuming this is where "old" browswers are redirected too, but it is obviously not installed properly.

Works fine on my Moto Droid.

That's the thing, the only time I feel like founders should get a different distribution of equity is if one of the founders is paying salaries, paying for hosting, paying for business cards &c...

That's how we are doing it at my company - my cofounder had the money and wanted to bootstrap, I was okay with that (I figure my cut will be worth more if we bootstrap instead of go 50/50 and find VC) so my cofounder is paying for everything including a "median" salary for me; we've done our split 20/80.

As far as the other vectors go, I feel like they shouldn't matter - all the cofounders have a role and everyone should be working equally hard!! My test of the app assuming none of the cofounders were paying for everything put the split (for two of us) at 58/42. Which is silly because my cofounder may be the reason why we have customers and is also a key player in the industry - but there would be no app, no features, and it wouldn't be working as well as it would if an outsourced rent a coder had done the work.

I've done about 4 startups now - and always chosen to split the equity evenly between the founders, despite the fact a tool like this one would have suggested I would have been 'worth' more than parity.

What this tool forgets is that a startup is a tough emotional journey and an emotional roller-coaster. In every startup's life there are moments of dispair, moments when it will all seem like too much effort. The ability to come through these as a team is as, or arguably more, important as being a brilliant coder, or someone having great contacts. In order to get that team spirit and togetherness that is key to the company being successful, I think it is better to split the equity more evenly.

Or - to put it another way - in most cases, founders shares end up being worth almost nothing (statistically most startups never get a proper exit). It's far more important to look at what will increase the chance of that exit, rather than how much you will own at exit.

Joel Spolsky wrote a little on founder equity and a potential method to divide ownership.

http://answers.onstartups.com/questions/6949/forming-a-new-s...

I think you pretty much takes what Groupon will give you.

I will, but I was first looking for some feedback on scenarios, see how far I can take this before explaining how it's done. Think of it as a double-blind experiment: if I told you today how it's computed, you would object to it, without trying it out. If you first try it and think it gives decent results, then you'll be more open to discuss the internals.