What is a fair amount of equity for a late co-founder with 2 original founders?

The “late” co-founder seems more and more common to me these days. I call them ex post facto co-founders. And they are wonderful.

If in your first year or two, you can grab someone with such great commitment and such great management skills that they are a co-founder in all senses except when they started — hire her!!

So what’s a fair amount of equity? If they truly carry the weight and responsibilities of the initial founders, and it’s pre-real product market fit (e.g., < $10k in MRR for example) … I say a 1:2 or 1:3 ratio is about right, depending on contributions. Probably 1:4 if you are just past product-market fit.

That’s fair. 33% of what the Day 1 co-founders have if there’s been material progress. Maybe a bit more depending on the situation. Maybe 25% of what the Day 1 founders have if you are at very early, but real, product-market fit. If you have something.

It feels fair, and proportionate. And fair is what you should do in this scenario.

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Published on November 9, 2017

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