Me and my three co-founders have been working on a product for a few months, we’ve been lagging on figuring out equity allocations, but we can’t put it off any longer.
It’s been especially tough because we’re a distributed team all working on this in our spare time, some of us have full-time jobs and some of us do freelance work, so we all have varying amounts of time we can put into the business.
No one has immediate plans to quit their job and work on this full-time, it’s also hard to say who will be committed and want to keep working on this in a year. Right now, the plan is to see what the demand/response is like once we release the beta and go from there. We’re planning on filing as an S-corp soon, and while we’re not discounting the idea of getting funding and going all out, we don’t have any immediate plans since our target market is too small.
My question - figuring out equity allocation has been a real pain since we’re not putting equal hours in at the moment and probably won’t be in the future, although the people who have been working the most will probably work less in the future and vice versa. How have other bootstrapped companies with more than two co-founders dealt with equity?
One suggestion I’m leaning towards is changing the vesting schedule dramatically where 25% of the total equity will vest in two years and the remaining 75% of the equity vests in the last two years - that way only the founders who are really committed (working for 4 years) to the business will be majority shareholders. Thoughts?
Thanks for your help!