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I was in a very similar situation 2 years ago. I am too technical, started a startup with 2 amazing co-founders and I now own 10% of the company. The key difference is that for that amount of equity, I’m only responsible for the technical side of the business. Also, because the company is more of a service than a product, having that amount of equity makes sense since my co-founders are doing all of the heavy lifting. Taking this example into account, it appears to me that the situation in your case should be the opposite.
Given the amount of work and responsibilities you have, it seems like you should own the majority of the equity.
It is also beneficial for your co-founders to give you more equity because, if they see that you are running the company well now, the equity split will motivate you to stick with the company for years to create value, regardless of the amount of shenanigans. I see making you the minority shareholder as a great risk - the further you progress, the more difficult it becomes. If the startup works, the time commitment is extremely high, and constantly asking yourself, “is this worth all this effort?" won’t help.
If they are concerned about giving up equity, they can use safety mechanisms such as vesting and a cliff, the typical get out of jail free card.
Giving you this much equity does not create long-term motivation to stay with your startup, especially if things aren't going well. The fact that they own more companies and are still trying to pull off such a deal makes me wonder if they are trying to capitalise on your excitement about living your dream. Because I don't know the entire picture, the best thing I can think of is to try to have a conversation with your co-founders and build a case for why you should have more equity.
It will also help if you know and can afford a business advisor, as they may be very argumentative in their favour given their experience. This is simply my opinion as a CEO - I am not attempting to persuade you to do anything. Try to think about this for yourself, making sure that you are happy with the equity split and that it motivates you (and your co-founders) to work on your startup for a long period of time.
As in my example earlier, the split can be different from equal, but this is unusual. Try not to make a short term decision, but think long term! |