I'm seeking some guidance on a business situation I'm involved in. About a year ago, I started collaborating with an acquaintance's brother and his partner on a software-as-a-service (SaaS) project. They approached me needing a frontend developer, but after assessing their existing setup, I realized I had to build both the frontend and backend and create a database from scratch. By the end of the year, we were waiting on one partner, who I'll call Guy, to finish some hardware work needed for our web app. Even though Guy has technical skills, he doesn't actually write code. I initially negotiated for a 10% equity share but managed to get it up to 15%. However, I've only signed an NDA, and there aren't any official agreements regarding payment or equity. Since then, I've taken the initiative to rewrite a lot of the code and prepare it for demo, but I haven't shared any of my work yet. I'm feeling quite frustrated because Guy is set to get 42.5% equity, seemingly for little contribution, and Buddy (the third partner) handles marketing and business operations. I've done some research and feel that my share is undervalued considering the amount of work and progress I've made. I'm not very business-savvy, so I'm unsure how to approach this and what steps I should take next. Am I right to feel undervalued, and how should I handle this situation?
2 Answers
You're on the right path wanting to discuss equity with them. If they're not open to that conversation, consider this: being the technical lead should come with a higher percentage, especially if you're essentially driving the project. My advice? Set up a meeting and present your case clearly. Highlight what you've built and why a bigger share is deserved. If they aren't willing to find a fair compromise, you might want to think about whether this is the right partnership for you.
It sounds like you may be underestimating the contributions of your partners, but 15% for the technical side of a SaaS product does seem low. Have you had a direct conversation with them about your concerns? It's crucial to clarify what everyone's roles are, especially since you've taken on more responsibility. If you feel that the partnership is not balanced, it might be time to negotiate for a larger share, maybe even aiming for 40% or more, since execution is key in this business. It’s all about the ongoing support and iteration you'll do after the product launches.
Totally agree! It's fair to discuss ownership percentages if roles have changed. You might also want to ask them what makes Guy's 42.5% justified in their eyes.
That sounds like a solid plan. Making your contributions clear might really help them see your value!