[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.