This is a huge foundational issue that can make or break your company, as it will affect every aspect of the business and will have consequences for the entire life span of the venture.
While you would want to reward the new hire for the future value he or she adds to your business, you don't want to compensate for the existing value he or she didn't help to create.
When it comes to splitting equity it is important to create a structure that keeps all key parties properly motivated in the ebb and flow of building a startup.
While your relationship with your co-founder may be peachy right now, there is a possibility it could turn sour down the road. To protect yourself (and the company), make sure these three areas are covered in your founders' agreement.
It helps to bring in others to fill any gaps in your skill or experience. Here are five variables that will help you determine how much a new partner is worth.