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Alex_Bell | 1 year ago
Technical Foundation and Completed Product: You have invested a significant amount of time and effort in developing the application, which has already passed the MVP stage and is ready for use. This substantial contribution provides the groundwork for further development and marketing efforts.
Maintaining Control: Holding 51% equity allows you to retain control over strategic decisions within the company. This is crucial to ensure that your vision and goals continue to drive the direction of the business.
Division of Responsibilities: Considering that your potential co-founders will primarily focus on marketing and business development, their contributions will be highly valuable. However, this does not diminish the importance of your technical input and development expertise.
Management Flexibility: Retaining a controlling interest (51%) also gives you the final say in case of disagreements. This is important for effective management and conflict resolution.
Motivation and Balance: Co-founders should be adequately motivated to work on the project, so they should receive a significant equity share. This can be around 20-25% each, which collectively totals 49%, leaving you with 51%.
An example of equity distribution could be:
You (Founder and Developer) - 51% Co-founder 1 (Marketing and Business Development) - 24.5% Co-founder 2 (Marketing and Business Development) - 24.5% This distribution ensures that you retain control over the company while providing significant motivation and involvement for your co-founders. It is also essential to formalize all agreements in a legally binding contract that outlines each participant's contributions and mechanisms for conflict resolution.
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