Retain of percentage after drop out of a developer?

AAnonymous ·July 13, 2018 ·2 answers

We are two startup founders working on the development of a product(app). It caters to a certain demographic and marketing plays a huge role. One person is involved in coding the app (30%) and other is responsible for the Business Operations (70%).

Currently, we have been looking at ways of nailing down the details of a formal contract and we have reached a roadblock.

Since the app developer might be moving away sometime and there might be a chance the developer doesn’t carry out the development of the app after its initial release, we are looking at ways of including a clause in the formal agreement that would help us restructure the Ownership of the company.

Currently, the developer owns 30% of the company. Could someone please give us a few ideas as to what percentage he/she shall retain after the initial release of the app if he/she drops out?

2 answers from the community

AAnonymous· Jul 13, 2018

Either the app developer is an employee or they are a founder.

If they are an employee pay them a salary or a bonus or with debt. That is, the app developer promises to put in a fixed amount of work and you come to an agreement with regard to fair compensation.

The other option is that you become 50/50 founders, and you all share responsibilities equally. It makes no sense to give 30% to somebody who isn't even fully committed, and for the app developer it makes no sense to fully commit if they only have a minority stake.

AAnonymous· Jul 17, 2018

first of all, a founder has no special rights. Statemenst such as "am I a cofounder or not" do not make any sense (except on the CV). The correct distinction should be: am I an employee or a shareholder or both, and how many shared do I have ?

The idea of 50:50 is bad. The slicing pie method is better.

If he possesses 30% of shares, then of course he posseses 30%, regardless of whether and where he works.

Last and most important point: your startup will fail if you have only 1 developper. Make sure to get a second person into software development, at least parttime. The aim is to have the source well documented, so that a new programmer can take over after the first one gives up or has an accident etc.

Retain of percentage after drop out of a developer?

2 answers from the community

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