For our latest Startup Spotlight, we chatted with Sean Tepper, the co-Founder of Tykr. We specifically dug into the founding of the company as well as Sean's perspective on how to approach equity splits with co-founders.
Tykr is a stock screener and education platform all-in-one that helps you make better investment decisions and beat inflation. Sean is also the host of the Payback Time podcast.
How did you choose your co-founders?
For Tykr, they actually were customers first. They were passionate about the product and motivated to help, so it was a natural start.
How did you split the equity as co-founder (equal, proportional, etc.)
I started working on Tykr in 2016 whereas the next partner joined in 2021. The equity split was easy. I proposed 30% to the next partner.
I've actually been down this road before and offering 15% or less to the first technical partner, and learned that it's too low. The sweet spot is between 15% and 30%.
What are the important aspects to think about when it comes to equity split?
For me, length of time at the company is important. But also consider the depth of the “working partnership” you have with the person.
With the knowledge you have today, would you do anything differently?
Before splitting equity, I recommend a “working partnership” for at least one year. No contracts. Just drive forward with a focus on making life easier for the customer. This year will help determine:
- How passionate the partners are about the company?
- Do they have the fortitude to keep driving forward through good times and bad?
People who sign contracts and split equity on Day 1 are making a mistake in my opinion. It’s like meeting a partner and marrying them on Day 1. No logical person would do that unless you’re forced into it.
In summary, if all partners are passionate about helping the customer and continue to keep their feet on the gas pedals through good times and bad, then they have proven to be good partners and contracts may then be signed.