[dmitri1981]

One thing that irritates the hell out of me every time is meeting a 'business' guy with the world's best idea, who is prepared to let a lucky developer have 10% of the venture in return for building the damn thing.

I am yet to meet a developer who has not had this very same experience.

[timmyd]

Agree completely. Was a business or rather "non-tech" guy - taught myself HTML4-5/CSS2-3/jQuery + basic C# - coded the entire design, UI etc [and still do it] - and do basically every server install, git, software setup etc etc. This effort was enough to find me my other technical co-founders who wanted to be involved. You've got to put in the effort otherwise you don't get respect in my opinion.

I've always held the view that any business venture you go in - you need to understand it from the ground up. If you're in tech - learn tech. If you're in construction - learn how to build 'something' [house etc]. If you're in finance - learn finance. Understand that "build a twitter script for me" - can't happen in 2 days [I think this comment is on "par" with the original poster's question. I smile now when "non-tech" people say to me they are building a web startup "exactly like twitter in scale in 5 days using NoSQL and the latest caching techniques" .... right ... haha]

I find the concept "strange" of "i have an idea but I don't have technical skills - but because of this idea that gives me the right to own 99.9% of the company". There isn't an " i " in the word "team". If you're a co-founder - it's an inherent facet of the word that you "co-found". The only exception I can see is that unless someones invested a whole heap of cash and others haven't - this is what changes the equity split. But that's up to the team to figure out.

Call me old fashioned - but thanks Henry Ford

"Coming together is a beginning. Keeping together is progress. Working together is success."

And thanks Thomas Alva

"Genius is one percent inspiration and ninety-nine percent perspiration."

The list goes on. You get the gist.

[vibrunazo]

I agree with this guy. Learning some very basic technical skills is very easy and can help you a lot.

A small tip I'd like to give to any non-tech person. Is to watch Stanford's CS106a lectures on youtube: http://www.youtube.com/watch?v=Ps8jOj7diA0

You can watch the whole thing in about a week. It gives you a decent grasp of what coding is. And they use a very friendly language that anyone can understand.

It's a very small effort that will make it much easier for you to talk and understand tech people. Worth your time in my opinion, take a look.

Also, it's important to note that there's almost always many alternative routes that you follow to get somewhere. While learning code yourself is a great route. It's for sure not the only one. I think the most common solution for people looking for a technical co-founder is to stop looking for a co-founder and look for an employee. Which can become a co-founder in the future once you get along. The article talks about this as well.

[mixmax]

You've probably not met good business people but "idea guys" that, as you say, have the greatest idea since sliced bread and want you to build it for 5% equity. These people are a dime a dozen and generally worthless.

The thing is that good business people are exactly like good hackers: Very rare. Good business people will never approach you with a good idea, they'll approach you with a thought-out strategy, proof of concept, money and customers. The idea guys are like people that have once made a wordpress theme and know basic HTML calling themselves hackers.

business people get a bad rep because everyone thinks they can be one if they can come up with a decent idea and wave their arms around a bit.

Nothing could be further from the truth.

[bugsy]

This is true that competent entrepreneurs are extremely rare.

Here is an example of one of my cases dealing with such.

Mr. P schedules a meeting. He is familiar with technology I have designed. He has an idea to enhance it with new functions, combining it with another technology he has licensed and market the combined product. He already has 10 employees, an office, an incorporated company, a working prototype board, and a reasonable contract. Before the end of the week we have signed a contract, which I had no concerns about, and he has written me a check for $1.2 million. I then ramp up, hire, expand and integrate my designs with his, and a year later the product is demonstrated at trade shows which leads to sales.

Here is an example of an incompetent idea guy. He wants to make umbrellas, briefcases, and hats that are made out of fabric which is a combination solar array and video screen. They will be self powered and show video advertisements which are downloaded wirelessly and which create income for the umbrella user. He has no technology for any of this, but that is my job. It should be a simple matter since solar, wireless and screens are all mature industries. I am to fund all development and manufacturing in return for 5% equity in his new concern.

That one is probably the most coherent and well developed of the "ideas" I have heard over the years from these characters. Don't worry, he has contacts in the industry, connections that will make UmbrellaScreen Ltd a guaranteed billion dollar company. It can't possibly fail.

[ChuckMcM]

Fortunately, it's a wonderfully quick way of weeding out the idiots.

Make it your first question, "How much equity are you planning to give this person when you find them?"

Then you can threshold your response, one way to do that might be: < 45% hang up and walk away. >= 50% take the second meeting.

You will pretty instantly weed out all of the "I'm going to change the world, won't tell you how unless you sign an NDA, and I'm being GENEROUS by offering you 10% if you do all the work." folks.

It may be rude to ask this first but your time is valuable and really it's like bidding in bridge, a shorthand to let you know if there is a game contract in there somewhere.

[o1iver]

I have been thinking about this exact strategy for a while. Like most programmers, I often get approached by "idea" people and I am thinking about telling people right away that they shouldn't even pitch unless they offer >= 50%... Like you say "your time is valuable".

[JoeAltmaier]

During 2002 (post-bust) I got approached 5 times with the sweet deal of developing a product for Nothing, and no specifics at all for equity down the road. Got to be a joke with my technical friends - How many are you up to today?

[mgkimsal]

I used to call those "dot com dreamers".

[int3rnaut]

What would you consider fair and reasonable? I'm one of the people who needed to read this article, because I am not as technical as I need to be to see my idea through, but I'm also not a "business" guy--and I am coming into this endevour with little to no baggage or pre-conceived notion on how things work--I honestly thought if I ever did find someone technical (I'm paying freelancers right now) it would be a 50/50 split--but in your opinion is that undervaluing a technical persons worth on a project?

[jarrett]

A 50/50 split means your non-technical contribution is worth the same as building the entire product, top to bottom, front to back. Having an idea for a certain software feature takes only a tiny fraction of the time it takes to implement that feature. So if you're just the "idea guy" or even the "vision guy," you're going to be putting in way, way less work than the technical guy.

So, what more can you do for the company? Although building the product is a huge endeavor, there are many smaller, administrative tasks involved in running a business. M of these are dreadfully boring compared to building the product, but if you want to justify your 50%, you probably need to take them all on yourself. Here are some of those things:

- Accounting and taxes, whether you do it yourself or hire an accountant.

- Dealing with lawyers. It doesn't stop with the operating agreement.

- Getting money, one way or another. Even though you're not paying your programmer, you'll have plenty of expenses.

- Paperwork: bills to pay, forms to fill out, forever and ever until your business ends.

- Choosing and applying for insurance providers, credit card processors, bank accounts, lines of credit, etc..

- Managing ad campaings.

- Blogging and promoting your blog.

- Hustling the tech press.

So now, as the business guy, you're thinking, "I can do all that!" And you certainly can. But that's not enough. You have to be _good_ at all those things to justify your split with an above-average coder. And I know from experience that these tasks do require talent and skills to do well.

For example, hiring lawyers and accountants may seem like a no-brainer. They're the experts; you just have to pay them so you can lean on their expertise, right? I'm afraid it's not so easy. Unless you hire true superstars--whom you probably can't afford--they're not just going to "take care of it for you." Getting the most out of hired experts like lawyers and accountants is a skill in itself, and you can easily mess it up. If you're skeptical, just read about all the startups that got into trouble despite (or because of) the advice they received from experts.

And that's just one example. The same applies to all the business tasks I listed above. So sure, you can do them, but you also need to have some unique talents for those things if you want to earn the same amount as the guy who's building the entire product.

[wisty]

I'd say 50/50 if the programmer works for free (and you bring something to the table), up to 90/10 if you pay them a decent salary. If you pay a full salary, you don't need to justify your involvement too much, though that can be a problem in itself - the tech guy might not really think too much of you or the project, and just wants the paycheque.

If you were pitching to a bank or VC for funding, not a tech guy for his time, what your pitch be? Domain expertise? Your existing IP? Your UX design skills? Your sales skills? Your organization and drive? Your killer business plan? I'm assuming there's a market for the product, but you need more than that.

There's not much justification for less that 50%. The only reason for you to take less than 50% is if you won't be contributing much, and if that's the case, who would want to partner with you? Or if you get a developer who is really impressive, in which case you could offer them more.

[invalidOrTaken]

There are two sides to it. It depends on whether you're overvaluing your own contribution. What exactly will you do while a technical cofounder is building your product? If you don't have a solid answer, you're not contributing much.

On the other hand, technical people, like many people, value money. Hiring an employee #1, rather than looking for a cofounder on equity basis, is the right move for some people. #aaronpatzer

[jdunck]

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

[mattgreenrocks]

This is excellent, thank you.