How much startup equity should you give an investor, partner or co-founder?

There is no single fair percentage. The defensible range depends on the person's role, cash investment, the value already created, unpaid work, direct commercial value, responsibility, risk, intended duration, current cap table and expected dilution. The transaction should first be classified as an investment, an active contribution, a hybrid arrangement, a new share issue or a transfer of existing shares.

Five per cent can be plausible for a meaningful minority role, but it is not a universal benchmark. It may be excessive for occasional advice and insufficient for someone acting as a true co-founder, taking core responsibility, working substantially below market pay and accepting long-term business risk. The conditions attached to the percentage are as important as the number itself.

A co-founder normally shares responsibility for building the company, accepts material risk, has a long-term operating role and contributes to core technology, product, market access or financing. An adviser usually has limited hours, bounded deliverables and no day-to-day responsibility. Titles should follow the actual role rather than be used to justify a predetermined percentage.

For a new share issue, the ordinary-share economic percentage is generally calculated as the investment divided by the pre-money equity value plus the investment. A EUR 250,000 investment at a EUR 1,500,000 pre-money value therefore corresponds to about 14.29% post-money. Special share rights, preferences and convertibles require separate modelling.

Do not enter zero and do not pretend that the investment automatically purchases the whole company. Use a dedicated pre-valuation analysis based on the company's stage, documented founder effort, risk capital already invested, transferable assets and intellectual property, funding required to reach a concrete milestone, financing alternatives, evidence quality and the incoming person's contribution. The result is an indicative negotiation range, not a formal valuation.

With a new share issue, the cash normally goes into the company and all existing holders are diluted. With a purchase of existing shares, the cash goes to the selling shareholder and does not fund the company. The correct calculation, cap-table effect, seller constraint and negotiation logic are therefore different.

No. A purchase price without a supportable value for the existing equity does not uniquely determine a percentage. The wizard therefore uses a separate evidence-weighted existing contribution and asset basis, shows a wider uncertainty range and warns that the result is not a market valuation or fairness opinion.

Start with a supportable market rate for the actual role, multiply it by realistic committed hours and the relevant period, subtract cash compensation and then adjust for evidence, execution risk, vesting and diminishing returns. Future promises should not receive the same weight as completed and documented work.

No. Hours are useful evidence, but equity should not increase indefinitely in a straight line. The marginal value of additional hours normally falls, very high weekly commitments need a plausibility check, and projections far into the future should be earned through vesting rather than granted immediately.

Knowledge is assessed by its relevance, scarcity, transferability and replaceability. General business support is different from scarce technical know-how, regulatory expertise, a unique production method or knowledge that is indispensable to the company's core product. The user is asked to select concrete descriptions rather than praise the person in abstract terms.

Commercial value should be tied to evidence such as signed contracts, attributable revenue, qualified distribution access, a transferable customer relationship, financing secured or a measurable reduction in time to market. A broad network or a promise to make introductions is treated more cautiously than value already realised or contractually supported.

Risk concerns what the person stands to lose or forego, such as salary, capital, career alternatives or personal exposure. Responsibility concerns what the person must independently deliver and control, such as product development, revenue, financing, staff or regulatory outcomes. Someone can carry responsibility without investing cash, or invest cash without taking an operating role.

A longer commitment can justify more equity, but promised duration should normally be subject to vesting and performance conditions. The wizard gives less incremental weight to increasingly distant years, because future effort is uncertain and should not be treated as if already delivered.

Every grant must fit within a finite cap table. A percentage that looks reasonable in isolation may become impractical once existing shareholders, a future employee or partner pool, later investors and the founder's minimum retained position are included. The wizard therefore tests the result against both the current and intended future ownership structure.

Dilution is the reduction of an existing holder's percentage when new shares, options or similar rights are issued. Dilution is usually sequential rather than a simple addition of percentages. The page's dilution explorer and the full wizard show how a partner grant, future pool and later financing round can compound.

Often yes, but the size must be linked to a concrete hiring and partnership plan. An oversized pool unnecessarily dilutes current holders, while no reserve can make later recruitment difficult. The pool should be modelled before agreeing a new partner percentage and revisited when the operating plan changes.

Vesting means that equity is earned over time or on milestones. A cliff is an initial period during which no equity permanently vests; after the cliff, an agreed portion may vest and the remainder continues periodically. The precise terms, repurchase mechanics and treatment on departure must be documented and checked under the applicable law and tax rules.

They determine what happens to vested and unvested equity when a person leaves. Without clear rules, a former partner may retain a large interest despite no longer contributing, or a genuine departure may be treated unfairly. The triggers, price, procedure and enforceability require careful drafting.

No. Economic ownership, voting rights, board rights, reserved matters, vetoes, information rights and share classes can differ. A 20% economic interest does not automatically mean 20% of every governance right. The wizard models ordinary economic percentages and flags control-sensitive outcomes, but the legal documents determine actual control.

No. It can show an indicative ordinary-share equivalent, but it does not calculate conversion mechanics, valuation caps, discounts, liquidation preferences, participating rights, anti-dilution adjustments or distribution waterfalls. Those instruments require a separate legal and financial model.

Confirm who owns the invention, patent application, software, designs, data, know-how and improvements. If the company is intended to own them, assignments and future-invention obligations should be documented. Equity should not be granted on the assumption that intellectual property has transferred automatically. Confidentiality and filing strategy should also be addressed before sensitive disclosure.

No. Historical cost, replacement cost, market value and income value are different concepts. Filing costs may support the evidence record but do not by themselves establish the commercial value of a patent or technology. The wizard therefore separates direct value, effort, investment and company valuation.

Prepare the current cap table, role description, realistic hours, cash investment or purchase price, compensation, intended duration, company stage, any supportable valuation, founder investment, evidence of existing assets and intellectual property, commercial evidence, future partner plans, financing needs and the minimum position the current founders intend to retain.

The wizard blocks mathematically impossible cases and issues targeted warnings. Examples include a fixed investment percentage that cannot fit within the chosen founder constraint, a seller who does not own enough shares, a future pool that makes the founder minimum impossible, an outcome near 50/50, a candidate majority, unsupported direct value or a role that conflicts with the entered hours and duration.

No. The wizard is a decision-support tool. It structures assumptions, calculates economic percentages, tests cap-table feasibility and produces a documented negotiation range. It does not provide legal, tax, accounting, investment or valuation advice and does not replace a shareholder agreement, tax analysis, corporate approvals or specialist review.

Obtain advice before issuing or transferring shares, granting options, changing voting rights, accepting a convertible instrument, assigning intellectual property, agreeing leaver terms or relying on a tax treatment. Professional review is particularly important when the result approaches a control threshold, when share classes differ or when the company and participants are in different jurisdictions.