Need to determine equity

8 months ago my friend and i started a business. I was the only person who gave the startup capital and working full time for the business. My partner worked part time for the business and for the past 3 months started to work full time for the business and thinking to do part time again. Whereas I wanted to remain full time.

The idea for the business came mainly from me.
I have more experience in running a business.
We both contribute equally in the work currently.

How much equity should myself and partner get?
What happens when a third partner comes in later with fund and act as a part time?

Thanks

There are two types of equity:

1. Equity given to founders: this is equity to reward people for their current and expected future contributions. There is a calculator at foundrs.com, and lots on here about this. Founder's equity should vest over time. I typically recommend 4 year vesting for full time work (i.e., if you leave, 2% of your shares remain yours for every month you worked) and 10 year vesting for half time work. That means working full time is rewarded much more than working part time, as it should be.
2. Equity bought for cash: this equity is yours forever, even if you leave the company. You will sell this based on the value of the company at the time the cash goes in.

For instance, you might:

• issue, e.g., 5,000,000 shares when the company is founded and sell them to founders for, e.g., $0.0001 each (with vesting contracts attached). This means putting in $500 in cash between you for type #1 equity.
• you could then value the company at, e.g., $100,000 for the equity you buy with cash (type #2), meaning you buy new shares, a few weeks after the founder's equity is issued, for $0.02 each. For $20,000 you would get an additional 1,000,000 shares.
• when a new investor joins, you might say the company's value has gone up to $600,000 and since the company now has 6,000,000 shares (5M founders shares + 1M your seed cash), the shares are now worth $0.10 each. You would issue the new investor additional shares based on the amount of cash they put in, e.g., you could give them 2,000,000 shares for $200,000.

If a new employee joins who you want to give part of the company to for future contributions (equity type #1), you would give them options. If you give them shares they have to pay tax on the shares as income. Options will vest over time just like founder shares do. Typically if the company is already up and running and has raised outside money, you would have a maximum of 10-20% of the company's shares that you can issue in options, so each new employee would get a fraction of that.