"The Company" sounds like it's worth nothing without code, though. You'd have to...

brk · on Oct 29, 2007

I've seen more rounds raised with no code than I've seen raised with lots of code and no business plan/idea.

Without more data, it's hard to know what the actual situation is here.

blader · on Oct 29, 2007

We have enough data to know that the company can't even pay their first employee.

brk · on Oct 29, 2007

Technically we have enough data to know that the company PREFERS not to pay their first employee.

sbraford · on Oct 29, 2007

brk - while it's sometimes nice to have varied opinions here on News.YC, I can tell yours will be modded down quite a bit.

This isn't "Suits News" or "B-school Guy News", it's Hacker News. I would view reading this as more of a learning experience to see how hackers view the world of startups, than trying to convert us to your viewpoint. Just my $.02, and welcome to News.YC!

brk · on Oct 30, 2007

Thanks for the info.

I hack a fair bit (mostly LAMP, where P = perl). I've created a few apps, both web and desktop, and have built a few various departments for companies, and have hired hackers in the past to work for me.

I've been on both sides of this 2% equity "problem".

If you guys all want to rally around the idea that the first developer in any startup is worth a double-digit stake based on nothing other than a spirit of camaraderie, that's fine with me, and I'm not offended by being modded down.

If you look at my various posts, I never said this guy WASN'T worth more than 2%, but I did say that there are more factors to consider.

Anyway, thanks for the info.

anamax · on Oct 30, 2007

It's not the title, it's the reward for risk and contribution.

Right now, it's an unfundable idea. If his contribution makes it fundable, that's significant.

sbraford · on Oct 30, 2007

brk - yup, there very well indeed may be more factors to consider.

I'm with several other posters on this one:

- 2% + a modest first-developer salary is totally reasonable (some would even consider 2% high here)

- 2% + $0 is a fool's bargain indeed

Any remotely successful entrepreneur could scrape up at the very least $5-10k to get a prototype working. These potential co-founders sound more like guys with an idea who just want someone to develop it for them (do much of the hard work), while paying / cutting in equity wise very little.

These guys don't sound like they can be bargained with, but the developer could ask for $200k in cash compensation if/when the startup gets funded. (doubtful they'd go for this)