Before you give away half your company, let's look at what that equity is actually worth—and whether you really need a co-founder, or just need something built.
You've got the idea. You've validated the problem. Maybe you've even talked to potential customers who said they'd pay for a solution.
Now you need someone to build it.
And everywhere you look—startup Twitter, YC videos, founder forums—the advice is the same: "Find a technical co-founder." Usually followed by: "Give them 40-50% equity. That's just what you do."
But is it?
Before you give away half your company, let's look at what that equity is actually worth—and whether you really need a co-founder, or just need something built.
What "Everyone" Does: The Standard Equity Splits
According to Y Combinator's official guidance, co-founders should split equity equally because "all the work is ahead of you." Their logic: if you're truly co-founding together, you're equals.
Here's what the data shows:
- True co-founders joining at Day 0: 40-50% equity each
- Technical co-founder joining 6 months later: 15-25%
- 2024 Carta data: 45.9% of 2-founder startups now use equal splits (up from 31.5% in 2015)
The standard deal also includes 4-year vesting with a 1-year cliff—meaning if your co-founder leaves before 12 months, they get nothing. After that, they vest monthly.
This all sounds reasonable. But let's talk about what these percentages actually mean in dollars.
The Math Nobody Does: What That Equity Is Worth
Most founders think about equity as a percentage. Abstract. Theoretical.
Let's make it concrete.
| Exit Valuation | 25% Equity | 40% Equity | 50% Equity |
|---|---|---|---|
| $2M (acqui-hire) | $500,000 | $800,000 | $1,000,000 |
| $10M (modest exit) | $2,500,000 | $4,000,000 | $5,000,000 |
| $50M (solid exit) | $12,500,000 | $20,000,000 | $25,000,000 |
| $100M (great exit) | $25,000,000 | $40,000,000 | $50,000,000 |
A "modest" $10M exit—not a unicorn, just a solid outcome—means you're giving away $2.5 to $5 million to your technical co-founder.
And these numbers assume no dilution. After a Series A and Series B, founder stakes typically dilute another 20-40%. That $2.5M could become $1.5M of actual proceeds for you.
Is that the right trade for your situation?
When a Technical Co-Founder IS Worth 40-50%
Sometimes, yes. A technical co-founder is worth half your company when:
They're truly co-founding with you. Not joining to build your vision—helping create the vision. They're in the room for every strategic decision, every pivot, every investor meeting.
They're taking equal risk. No salary for 12-18 months. Burning their savings alongside you. If the startup fails, they lose as much as you do.
They bring more than coding skills. Technical vision, not just execution. Domain expertise you don't have. A network in the technical community.
You want a partner, not a builder. You genuinely want someone challenging your assumptions, pushing back on your ideas, and sharing the emotional weight of founding.
The product IS the technology. You're building something technically novel—AI/ML, deep tech, complex infrastructure—where the technical decisions are strategic decisions.
If all of this is true, then yes: find a great technical co-founder and split the equity fairly.
But be honest with yourself. Is this really your situation?
When You DON'T Need a Technical Co-Founder
Here's the uncomfortable truth many founders don't want to hear:
If you have a clear product vision and just need it executed, you don't need a co-founder. You need a builder.
Signs you're looking for a builder, not a co-founder:
- You've already validated the idea with customers
- You know exactly what the MVP should do
- You're looking for someone to build your vision, not co-create a new one
- The "co-founder" would be mostly heads-down coding, not strategizing
- You wouldn't want them in investor meetings or board rooms
Many "technical co-founders" are really just the first engineer with an inflated title—and an equity package that reflects a partnership that doesn't actually exist.
Giving someone 25-50% equity to write code is like giving a contractor half your house because they built the addition. The work is valuable, but it's work you could have paid for.
The Real Alternatives (And What They Cost)
Let's compare your options honestly:
| Option | Build Cost | Ongoing Cost | Equity Given | Best For |
|---|---|---|---|---|
| Technical Co-Founder | $0 (sweat) | Reduced salary | 25-50% | True partnerships |
| Development Agency | $50K-$150K | Maintenance | 0% | Funded startups |
| Freelancers | $15K-$50K | Re-engage | 0% | Simple MVPs |
| No-Code (DIY) | Your time | $500-$2K/mo | 0% | Quick validation |
| MVP-as-a-Service | $0 upfront | $250/mo | 0% | Lean validation |
That last option might surprise you. Services now exist that will build your initial MVP—working app, real workflows—with no upfront cost. You pay a monthly fee ($250/month in my case) that covers hosting, maintenance, and ongoing support. Need additional features beyond the MVP? Those get quoted separately.
Do the math:
- Technical co-founder at a $10M exit = $2.5M+ given away
- MVP-as-a-service for 6 months = $1,500 total, 0% equity
- Even if you stay for 2 years = $6,000 vs. millions in equity
The Smarter Path: Validate First, Then Decide
Here's what I tell non-technical founders:
Don't make the co-founder decision until you've validated the idea.
The smartest approach:
- Build an MVP for minimal cost ($0-$5,000)
- Get it in front of real customers
- Collect actual revenue or strong signals
- Then decide if you need a technical co-founder
Why this works:
You keep 100% equity during the riskiest phase. Most startups fail. If yours does, you've lost a few thousand dollars—not 50% of nothing.
If it succeeds, you have leverage. A validated product with paying customers is a much better negotiating position than "I have an idea and need you to build it."
You learn what you actually need. After working with a builder, you'll know if you need a technical partner or just ongoing technical support.
Investors prefer it. VCs love founders who've validated before building a team. It shows execution ability and capital efficiency.
Use a service to validate and build traction, then decide if you need a full-time technical partner. You might find you don't.
Questions to Ask Before Giving Up Equity
Before you offer anyone 25-50% of your company, ask yourself:
- Am I looking for a partner or a builder?
- Would I want this person in board meetings and investor pitches?
- Do they bring unique strategic insight, or just coding skills?
- Could I achieve the same result by paying for development?
- Am I giving up equity because I should have a technical co-founder, or because I genuinely need one?
- Have I validated this idea enough to know it's worth partnering on?
If you answered "builder" and "coding skills" and "could pay for it"—you probably don't need a co-founder.
The Bottom Line
A technical co-founder can absolutely be worth 40-50% equity. True co-founders who share risk, vision, and leadership from day one are invaluable.
But "technical co-founder" has become the default answer to "I need something built"—and that's not always the right answer.
If you have a clear vision and just need an MVP to validate it, you might be giving away millions of dollars in future equity for something that costs thousands of dollars today.
Build first. Validate first. Then decide.
Not sure which path is right for you? I help non-technical founders figure out exactly what they need—sometimes that's working with me, sometimes it's pointing you toward a co-founder. Schedule a free consultation and let's talk through your specific situation.
