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Seeking Advice Regarding Onboarding a CTO

by marad0na

We are 3 co-founders (Sales & Operation & Product) in the B2B SaaS business, we already have launched our beta (more than MVP) and working on acquiring our early adopters' customers, and because we are bootstrapped we can't afford to continue spending on the development without any fund, and for scalability, we need a technical partner, initially will have equity solely without salary and will be part-time, after getting funded or have good revenue we will offer him a salary and onboard him as full-time.

We currently have 2 potential technical co-founders to choose from, we agreed on a 2 months probation period to test them, so we have currently two questions:
1- How much equity should we give him at this stage?
2- shall we grant him access to the source code and start working?

Any other tips or best practices are welcome

marad0na's avatarmarad0na
on March 5, 2022
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  1. 1

    Hi,

    Tech lead and CTO here with 15+ years of experience in software here. I'd love to help. Please note that I'm talking from my own experience, and the following are not hard rules - a.k.a. you're responsible for your own decisions.

    1. I'd wait for funding before onboarding a CTO, especially after managing to develop the beta. That's because it'd give you the ability to negotiate "vesting" as well. Afterwards, I'd give a technical co-founder around 10-15% with a fair amount of pay. If you only give equity, I would expect equal amount of shares with other co-founders.

    2. I'd make sure to consult a lawyer for the necessary agreements. Being a CTO doesn't mean anything without seeing the code, so after making sure the papers are in place, it's the logical next step.

    ulsc's avatar ulsc
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    5 years ago
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    1. 1

      Thank you for your valuable insights, we were already going towards the same approach you proposed here.

      marad0na's avatar marad0na
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      5 years ago
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  2. 1
    1. Depends on how much you are going to pay him and how much you have left to give
    2. This is the whole point you are getting CTO (After you have the paperwork sorted)
      attach the shares with a period of at lest 6 mounts before you transfer them - any partnership needs a test period
      get a 3th party assessment of your CTO ideas and plan for the app/system you are building (contact me if you want help with that )
      as a general rule, pick the one that have better work ethics not the one you like as a drink buddy.
    petrovn's avatar petrovn
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    5 years ago
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    1. 1
      1. at first just equity for like 6 months
      2. How can I guarantee his ethics and this the whole source code?, I'm assessing two remote CTOs not actually in my country, found them through YC co-founder match, I have connected with you on LinkedIn so you can help us assess them in our next meeting.
      marad0na's avatar marad0na
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      5 years ago
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      1. 1
        1. Equity get automatically transferred at least 6 months after the signing of the contract.
        2. the 2 months is to check the work ethics of your candidates, if you never manage people you will be in trouble, big trouble
        petrovn's avatar petrovn
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        5 years ago
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        1. 1

          Thank you Nikolay for your comments, and the extra mile u did by having a quick online call together, you gave me a lot of insights and advice.
          It was a pleasure e-meeting you.

          marad0na's avatar marad0na
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          5 years ago
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