How to properly divide shares in the IT business?

Question

Startups

I know that there is a lot of recommendatory material on the Internet, but I would like to know the real situations.

By what merits to evaluate the share of the participant?

Should a software product, if it is simple in technical execution, be considered more labor-intensive and more significant than efforts in marketing and promotion, product design, customer relations and personal sales?

Indeed, in fact, an idea that already represents software is worth nothing until it is bought, and sales are a separate conversation, especially in the B2B segment!

Answer 1

An old topic, but I did not get an answer that would satisfy me. So I set out on my own and found it. I found exactly the option that is both objective and transparent.
The assessment of the shares in the project is determined by the degree of involvement and the amount of work (participation in the project) based on an average period of 5 years. A simple example.
The product is made by one person, for example, 4 months for 40 hours a week.
The product market, let's say 1000 companies, where the average transaction period takes 3 months. And let's say it takes 80 hours for 1 client to process and close a deal. And now we consider how many managers are needed and how much time they need to process 1000 clients.
There is also an excellent concept of vesting period and cliff. These are security tools in case a participant leaves the project for one reason or another.
vesting period - the time that a participant must work in the project for the entire share to be transferred to him (usually 4-5 years), if it leaves earlier, then the share is calculated relative to the worked vesting period.
cliff - the minimum mining period to get a certain share in the project, usually 1 year. If the participant leaves before working out this period, then he loses all shares in the project.
For example, there are 2 participants in the project, each has 50%, vesting - 5 years, cliff - 1 year.
They work for 2 years, respectively, for 1 and 2 for 10% or 20% in total (100% is divided by 5 years and divided by 2 participants, it comes out 10% per year for one participant).
1 decides to leave - he has 10% left.
The issue of blurring / non-blurring of a share when an investor enters is a separate issue.

Answer 2

Yes, just think in your mind and discuss. I remember that Paul Graham had: the optimal division is when each of the participants is a little dissatisfied (getting slightly a bad deal).

Answer 3

“After all, in fact, an idea that already represents software is worth nothing until it is bought, and sales are a separate conversation, especially in the B2B segment! „
Apparently, therefore, programmers receive less for creating a product than managers who promote this product ...
And what company? What are the relationships in the team? We have everything on full trust, we work on the idea, and the money is like a bonus, so to speak)

Answer 4

As for me, this is a good distribution:
- 15% of the net profit - for all participants who are not involved in sales,
- 10% of sales - to sales managers (promotion),
- 30% of the net profit - for development (or repayment of obligations ),
- 20% of the net profit - current promotion and advertising costs,
- 10% of the net profit - stabilization fund
- 10% of the net profit - to management, co-founders.
The scheme is a little unstable, since it gives salespeople not a percentage of profits, but a percentage of sales, which is initially smaller, but is focused on successful products, and on the fact that salespeople will be actively engaged in business and within a short period "bypass » developers by level of payment.

Answer 5

Indeed, in fact, an idea that already represents software is worth nothing until it is bought, and sales are a separate conversation.

Oh well. I'll see how much a seller who has nothing to sell will earn ;)

Answer 6

The root of your problem is that someone expects to get more than they earned (no, no, they didn’t DESERVE, but they earned). If you think about it, you will understand who this (or these) someone is. Draw your own conclusions.

Answer 7

We have a 50/50 project partner. He is responsible for sales, I am for technology. But there is one caveat - all costs for advertising, posting ads (our project is offline), etc. are deducted not from the total money, but from half of it. And if I don’t want or can’t solve some necessary technical problem, then freelancers’ services are paid from my half. We've been doing this since 2008.