I am starting a startup business and as I have no knowledge other than a good idea, I decided to hire a mentor. Since that particular time, I have been continuing my work with him and for this particular work I pay him on an hour basis. Now, as I am getting a chance to employ a team, he offered me a way to come on the board and wants a fixed percentage of the organization. Until and unless I raise a large amount of money, he said that he is ready to continue his works as a part employee at a low cost. I am confused about the amount that is meant for an ownership. I really need help as I am confused that whether I should find another person to be in the position of CEO.
This question is similar to the question asked by a person that should I marry the person with whom I am dating? If you sign a deal similar to this you should be sure that this particular person is the perfect person with whom you can live for your whole life. Giving a large per cent of the company forever is a big deal. The only amount left with you which you can offer to the company is only hundred per cent. The thing that makes me worried is that you are one among those people who have not signed a deal till now and at the same time you are wondering that if you should hire somebody else or not. If you have this particular though then I am sorry to say that it is a negative sign.
His offer to work as a part time employee at a low rate however is considered as a good sign. It seems like he has faith in you as well as in your business. So, it is a bit confusing task to find out that which percentage is correct? The answer depends on the chart. The plan has nothing worth in it. The thing that matters is the how a person executes the idea. Executing the idea sometimes needs money and also the individuals who invest money in getting the value of the ownership. You should not leave it between mentor and yourself. You should start searching for another person like a lawyer whom you can totally trust with the experience of small business, a counselor or different counselors at the business Development Center.
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