[trevelyan]

My suggestion is zero. A formal business plan simply isn't useful unless it can be used to get funding. And it really doesn't matter how much time this person has spent on it since the plan isn't likely to survive first contact with the market. What is needed is the hard work of building the product and iterating it again and again while getting users and traffic.

On the other hand, taking the initiative to get a project off the ground is actually worth quite a bit. But that work doesn't stop with handing a business plan over to someone else to execute.

[nickh]

The CEO (who had the idea and wrote the business plan) has validated the idea in the market. Also, we have a direct, funded competitor now, which has also validated the idea, and one of our revenue streams.

So the idea is valid and lucrative. I'm just not sure how much equity should be attributed to that.

[trevelyan]

Your CEO hasn't validated anything. Your competition has, and if you aren't giving them equity it isn't clear why this guy deserves anything. Factor in that the idea isn't original and I don't see what value is being provided here.