Looking for specific suggestion regarding company shares


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Possible Duplicate: Forming a new software startup, how do I allocate ownership fairly?

I just want to say that I've read a lot of threads regarding this subject, including the most popular one (here ), a lot of related threads, lots of Google searches, investopedia, and they've all been very useful. It's just that I'm looking for someone that can help me maybe tailor something to my situation.

We're building a service company "the startup". We are 3 people in total (2 brothers and me). My partners and I are really good friends and they trust me a lot.

I'm in charge of the systems/infrastructure which is the heart of the service, so I am key to the project (no bragging, my partners know this). I'm quitting my job soon to go full-time working for the startup, and aiming at working 6 months without salary/pay. I am not investing any cash, etc... other than my valuable knowledge and time.

One of the brothers is also a tech-oriented person. He is working on all of the website front-end and is helping me a bit with the back-end infrastructure. He's also taking care of company paperwork for the moment. He will be investing (confirmed) around 10k-15k in savings. Going in with no salary.

The second brother is mostly a business/marketing person, right now he is not doing much except networking and planning, but will be in charge of business development and marketing strategy (he's the face of the company). He might (not sure) be investing around 10k. Also going in with no salary.

The thing is now, the second brother managed to get an early investor on board. He is a family friend and very eager to invest in us. This investor has the following to offer:

  • Around 30k investment
  • A large network of people and companies (could bring in quick business)
  • A free office to setup our infrastructure
  • Anytime access to a lawyer and an accountant for free

We met with the investor and his lawyer and they're playing hard ball, they know way more than us in terms of technicalities, funding, investments etc... The funding is necessary, we have a steep startup cost, as well as operational costs when we first launch. So having a free office and more cash is something we really need for example.

So now we're a bit lost on how we should be dividing everything fairly. We each value each others contributions but we just need to get everything setup now to avoid any problems in the future.

Also, we were thinking of somehow implementing employee stock options, as we wish to attract talent to our company and offer them something to look forward to, but not sure how we would go about doing this so early on with that much players in the field.

I'm ready to read more, so any specific links would be appreciated. But I'll be grateful if I can get some experienced opinion or recommendation on how to handle the situation.

Notes (added as questions come):

  • The startup is already incorporated (all paperwork done), and we can issue unlimited number of shares.

Equity Partnership Shares

asked Mar 28 '12 at 14:38
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User1202888
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Equity Partnership Shares