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What percentage of the company should a marketing cofounder be entitled to?

Currently i am shopping for marketing cofounder and I was approached by a marketing person who offered to handle all of the marketing and bus development for an exchange of 50% of the company.

I was thinking to agree, but now i am thinking to offer a trial period where he should bring some sales before hand and only then possible offer 50%. Or What are other safe ways to handle marketing efforts with cofounder?

29 Replies

Mitchell Portnoy
6
0
Mitchell Portnoy Entrepreneur
Healthcare Information Executive
That's a LOT of equity to demand. If this person is going to be CEO and President and is committed to your project as you are - then perhaps this might be (more or less reasonable). But what of other founders - key employees to come? Shouldn't you reserve equity for them as well?
Tim Kilroy
7
1
Tim Kilroy Entrepreneur • Advisor
Analytics - LTV - Boosting Profits - Digital Marketing
VESTING. If you think that he is worth 50% of your company, then go for it - except that the 50% vests over 4 years and nothing vests until he has been there a year (so on day #366, 25% of his options "vest" - that is. he can purchase them at their value when he started) but that gives you 1 year to figure out if he is worth the equity share...
Dax Hamman
3
0
Dax Hamman Entrepreneur • Advisor
Founder at Project GORDON (currently raising funds)
Hi Boris - that's an enormous amount. So many factors about your business will determine my response, but unless you really want this person to be everything, don't expect to take on many other people, then MAYBE 20. But start thinking below 10%. Of course, that's an answer outside of knowing anything about your business.

Remember, most CMOs last 2 years.
Also remember about dilution. You keep 50% now, you do a couple of rounds, you miss a number, you do a round, you aren't left with much at all.
David Fridley
2
0
David Fridley Entrepreneur
Founder at Synaccord
Pay for performance, pay for milestones, vest it, but don't just sign it over. I am considering a grunt fund. See slicingpie.com. I would love to hear from anyone who has done it.
Roger Wu
1
0
Roger Wu Entrepreneur
co-founder at cooperatize, native advertising platform
There should be a cliff and vesting as the others say, but just like this platform, you should bring him on as a consultant first, figure out how you work together and if you have complimentary skill sets. (date before you marry).
Bonnie Stone
1
0
Bonnie Stone Entrepreneur
Founder & CEO at Butter Studios
Keep a minimum of 51% of the company. In the event the partnership does not work out you want to be in a position to maintain control. I went through a similar situation and it was a nightmare to change ownership back afterward.
Peter Mansfield
4
0
Peter Mansfield Entrepreneur
Accomplished marketing pro focused on user acquisition, partner development and branding in venture/tech
That's way over the top. I'm a startup marketing specialist. I get in very early, and work for equity/cash. Single figures is more realistic!
Andrew Grubb
6
0
Andrew Grubb Entrepreneur
Head of Innovation at Mercer
Simple: slicing pie by Michael Moyer. Although dynamic equity may not be for everyone, its concepts are founded on fair and equitable treatment based on the value that individuals bring to an organization (startup).

If somebody 'demanded' 50% equity to join my business, I would struggle to not find that offensive. Keep shopping Boris, you'll find quality people easily.
Bill Blummer
0
0
Bill Blummer Advisor
Digital Media Sales & Management Executive.
Depends on stage and if u put any .one in...
F. Andre Fortune
5
0
F. Andre Fortune Entrepreneur
Managing Director at Pristino Foods
Boris; Marketing is NOT sales. Marketing (hopefully) begets sales. The smart way to to counter his offer is to give him/her a wholesale cost on your product or service with support materials et. al. and let the marketer keep 100% of his selling price. Let him create a separate company (LLC) for his marketing and sales efforts and you keep 100% of your company. His success is them based on his performance without involving an unproven entity inside your company. This is an arrangement that I have not only used in the past (because the concern cuts both ways) but am currently finalizing as we speak. You have to ask yourself why a "marketer" would want a percentage of your company when he can have 100% of his own. You will need a binding agreement, in any case, that is both a nondisclosure and a non-compete to allow you to seek remedy if he goes sideways on you.
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