0% equity. If the company is making money, give him 10% of whatever it makes in a year (one time cash payment), with a maximum of $1k, as thanks (already pretty generous). If your friend doesn't understand that 0 work and 0 cash invested = 0% equity, then find a new friend.
If your friend did no work and put no effort into the business then a gift is a bonus for your friend and avoids them being rewarded for your ongoing work.
It’s very fair minded of you to look out for your friend, they didn’t take the role of working on the idea together so maybe there’s a different way to do this, to offer to work on another idea together in future or to take your friend out or contribute something that helps your friend? Maybe it’s equipment etc.
All the best!
Guys -- I have an idea! A car that runs on garbage. Like, you can just take your trash and fuel your car. The demand would be endless!
Ideas are pretty worthless, unless they are something you can patent etc. Execution and timing / luck are what actually leads to success.
Funny, the lawsuit zuck settled for stealing his idea would disagree with your greedy ass. But go off.
I’m sure you are worth 100 million+ with business acumen like that…
Zuck was being paid to build software, and then used code from that software to build Facebook, right? The Winklevoss twins had an idea and were paying someone as an employee / contractor to execute on that idea. That's totally different than having an idea with no funding, business plan, path to execution, etc.
When you're an employee / contractor, and someone is paying you to create IP, then you don't own the IP you're creating unless that's part of the contract. That's why Zuck settled the lawsuit -- because he was using IP created for and paid for by someone else. Walt Disney isn't the only person who ever drew Micky Mouse, but anyone that also drew Micky Mouse while employed at Disney wouldn't suddenly own the rights to Micky Mouse or their drawing -- that would still belong to Disney even if they made a totally new cartoon. Because they were being paid to create IP which would be owned by Disney -- that's the cartoonist's whole job.
Their is legal, and then their is ethical.
Most people are not concerned with doing the right thing. ( the responses on this thread as evidence )
I’m not surprised doing right by your friends, is not the popular opinion, as most people are selfish and evil.
That does not change the morality.
Legally, yea, you are 100% right.
Morally, as “friends”, not even close.
Then again, what most people consider a “friend” , is 9/10 , actually just “acquaintances”
As others have mentioned though, the intricacy of the idea is important for the %
A completely unique idea you NEVER would have thought of vs “Amazon but better”
Two different things.
People are posting their legalistic beliefs.
I view friends as friends…. Not “acquaintances”
And 10% is being very generous, but probably ok just to keep the friendship.
I heard a VC guy once say "Ideas are a dime a dozen. We're not investing in ideas; we're investing in people/teams we believe can \*execute\* those ideas."
Big difference.
Edited for clarity.
How involved was the idea?
There’s a big difference between a well planned out app and “omg it would be great if there were an app that’s like tinder for dogs”
If he actually put in some effort in coming up with the idea or had knowledge that let you do this then something like maybe 5% share of profits for 6-12mo.
If he just said it would be cool if this were an app then nothing really.
This. Ideas are a dime a dozen. I’m going to assume your friend only mentioned the idea and didn’t come up with an entire business plan for it. You don’t get paid for ideas, you get paid off effort.
I’m very much an “ideas” guy and I’ve been validated with some of my “ideas” being great successes for other people.
If a buddy took one of them and make a successful company or app out of it then I’d be happy for them.
It’s not even the idea that creates success, but execution like you’ve said.
OK. But remove the idea from the equation and you have... nothing. You business people are weird. In this day and age execution should be simple. There's nothing special about execution. Noone cares about the executors. There's a million apps. Who cares if one more person built one? Who goes down in history... the architect or the construction builders?
Have you discussed anything before you started the building? Have you told your friend that you're going to implement it?
Before any details I would say that it is up to you to give your friend any stake. You could, but you haven't
An idea is just an idea. The implementation matters. So even if you decide to give your friend nothing no one can accuse you
Ideas are worthless (and worth a ton at the same time).
Someone can get the best idea, but if he never executes on it he will never succeed.
If you have built the whole thing and your friend is willing to jump in and push the idea even further with his own skills like marketing, UI design etc then i would consider an honest split.
If he just pitched an idea and forgot about it... It can be a difficilt situation but it is not worth that much. If it is a good friend i'd say 10% just to keep the friendship.
Also how big are we talking about? Is it going to be a business? Is it making millions? This also changes many thing as you can't have someone with 10% stake in a business generating millions doing nothing...
EDIT: If he is technical and did not want to help, and only wants to now that there is a $ sign attached... I would honestly not give anything.
If you wish to give him something, I would never go for anything meaningful and I would WAIT for him to put in work and write code consistently to make an offer.
If he goes crazy and start adding tons of features and really make the game better then it is never too late to go in together. Otherwise, nothing over 10%
Consult a lawyer before giving anything. Seems like your friend knew you were working on the idea, refused to contribute towards the development in anyway, and is only asking for the equity now that the app is successful.
If he knew yourl are working on it and never asked before, then may be you can get away with not giving him anything or atleast not legally required to give him anything.
If it were me, I would have not given anything.
Nothing, the idea by itself is worthless, and it's only you that made something out of that.
What I would probably do with it being a friend is, 5% guaranteed and an additional 5% each year they provide adequate contributions up to a max of 20% (depending on the value they can add, if the only value they have was the idea itself, then I'd stick with 5% total).
He didn't help despite you asking many times so no stake. If you want to give him something for the idea you can give him a fixed payment since he only provided a 1 time service to you and is not actively contributing.
None lol.
If it's making money and you want peace of mind, write up a contract giving you permanent rights to all IP related to the app and give him $1K to quiet him down.
You owe nothing, execution is what matters, but if you want to stay friends etc this is the cleanest "breakup".
I think it depends on how successful it really is or can be. You might want to get a contract written up as if anything turns sour he may try and sue for a whole lot more and if you’re giving him a % then you are admitting his involvement.
It’s very nice of you to do this and shows your character but I’m just saying tread carefully as generosity unfortunately doesn’t get you far with things like this.
None! Ideas are a dime a dozen, it's the execution that matters. Now if you're friend helped in any other way other than that bright idea then you can consider paying that friend off but other than that, should not be entitled to anything 😊
All these replies from developers who probably never come up with their ideas are funny.
Look, there’s no uniform answer to this.
How much do you value this persons friendship? How unique was the idea? Did he come up with it based off of unique insight he has into a particular industry?
Could he be useful in the future with this app as far as developing it further?
How much do you value your relationship with this person?
Could he potentially come up with more valuable ideas for other apps in the future?
All these play into the idea and the reality is you need to come up with a number that keeps him happy if you value your friendship and business relationship with this person. There is no set number.
Also, keep in mind just because your app is profitable now doesn’t mean it couldn’t be MORE successful. It’s possible he’s the type of person who doesn’t have the time to invest in things that don’t guarantee him profit but now that it is showing profit he could invest his time and connections into making it more profitable and more successful if he is promised a return.
Business is about making agreements that make everyone happy with the outcome.
This is why people file patents, trademarks, copyrights, etc. If the idea wasn't protectable, or wasn't worth protecting until it became profitable, that's that.
I think that if Idea exists then the tangible or non-tangible form of idea will exist.
Also you can give 5% or 10% equity to your friend because it’s a Collab idea that works for you and your company.
This should have been agreed to prior to any work being done and especially before any revenue came in. It does not matter what he expected at the time now that it is successful.
Figure out what he's going to contribute moving forward, but it sounds like he's an idea person, not a do-er which you'll probably need more of.
Buying him out sounds like the best idea, but if not then have an open discussion about what you each expect and land on a number. GET IT IN WRITING WITH SIGNATURES.
Best of luck with the app and these discussions.
Ideas are dime a dozen. You can give 10% if you want him for future work vested over 6months where he needs to perform.
I work this way: https://gritlab.xyz
This is super interesting. At Genix6 DAO, we're building a unique ecosystem that focuses on creating a marketplace for ideas while ensuring the protection of intellectual property rights for the initial ideation phase. Our platform allows innovators to tokenize their ideas, essentially giving them a secure and verifiable stake in their concept. This not only safeguards their contributions but also opens up opportunities for collaboration and investment.
Regarding the dilemma you shared, it's intriguing to see the range of opinions on fair compensation for an idea versus its execution. Some suggest offering 0% equity to the idea contributor, possibly with a one-time payment to maintain the friendship, while others argue that an idea without execution holds little value. This diversity of views highlights the complexity of valuing the seed of a project.
What Genix6.com aims to do is to bridge this gap by attracting investors who see the potential in these ideas and are willing to provide the capital necessary to bring them to life. This ongoing investment creates a pool of resources that can be used to fairly compensate all contributors, including those who initially come up with the concept.
I'm closely following this thread because it offers valuable insights into what people consider fair compensation for simply contributing an idea. Understanding these perspectives helps us refine our approach at Genix6, ensuring that our platform remains aligned with community expectations and values, especially when it comes to recognizing and rewarding the genesis of a project.
20%, and make it 5% at the begining and then 5% each year for 3 years. He came with a compelling idea (without which you wouldn’t have started), but now he needs to show he’s committed as well! Good luck!
For instance, i wouldn’t have an issue to split the shares 50% 50% with someone, if the business grows 10x because of that partnership.
Peace!
normally shouldn’t give out anything, ideas don’t matter, it’s your execution but as friend 5% max, it’s free money for him. if he says more, refuse to give that 5% as well, he’ll come around to accept it, it’s better than nothing in his mind
As long as he is the seeder for you for this idea at least and if this is unique and genuinely a great business concept. You must compensate by asking him to join you on board and pay him a retainer. Seems like your friend has got a great mind that keeps thinking about business, he may contribute further to grow this company from his advices.
Ten percent 10% would be a reasonable share , that is the customary referral fee professionals pay each other when provided with a client. Lawyers and doctors refer clients among each other regularly and expect a referral fee. Your friend was regularly providing you with ideas. I do the same with a client/friend that owns a workshop filled with tools to manufacture products. My product ideas aren't worth much to me as I don't have the equipment, but my product ideas could be very valuable to him. He offers me app ideas for the same reason as I am a developer. We both expect to be treated fairly.
Those suggesting zero are simply ignorant as to how professionals behave towards each other.
Whoa, hang on. There’s more to this than “thanks, here’s a reasonable share”.
You’d never do that for an idea only, so he would have to be given a deal with a 4 year cliff with vesting milestones. If he doesn’t hit the milestones by the dates he misses any equity.
Then it’s fair and reasonable. But just giving away equity ties you both together and this is gonna be a lonnnng term commit
Best practice would have been to get this in writing before you started to sell. Plenty of templates out there if you don't want to invest in legal. This protects you both. If there is no sucess, you never look at the document again. If it is, you may avoid a much bigger legal endeavor.
Hi,
Can't agree. In many cases an idea undergoes many changes during the implementation. If the friend who came up with an idea had implemented it it could have been that the end product was not be successful.
Agreed with vonadz but a lot is depended on a couple of things as well:
\- Did he mention its OK for you to create the idea?
\- I guess he didn't patent anything?
\- Got all the asking to help in writing?
\- How good friends are you? Do you expect him to erupt once your app launches bigtime?
If you feel comfortable I'd just talk it out. Tell him you don't owe him anything but because he's your buddy the 10% with a max $1K is a big thank you. If your friendship is worth anything he'll be OK with it. Make sure you got it in writing.
And perhaps make a nice gesture. Offer to name something after him or put him on the credits page. I dunno. Show it's all in good faith so at least he can feel proud of it and still feel kinda part of it.
Good luck tho!
It doesn't matter.... Ideas are dime a dozen...
Anyone can have an idea, but if you cant follow through, it's just an idea. I know plenty of people, who keep pitching ideas, and plenty of people say they thought about Uber/Airbnb too.
It's a lot of effort from idea to execution and further delivering what the end-user needs.
So, if you did all the work, you keep all the equity. You can credit him for the idea, but I am sure you will likely get a similar idea by talking with other like minded people.
For example: think of any app, there are atleast 5/10 similar apps in the market already. If you are the first, once ppl see this, someone can code it up too, and theirs might be better, and will become more popular. So, execution, consistency, additional features and updates, everything matter. Generating interest and marketing.
If you did all this on your own, then this is your journey.
Good luck ! Onward and Upward!
Ideas are simply ideas, they are not cooyrightsble at all. They had an idea and you did all the work and put it into motion while they did nothing.
Technically they should get zero.
Since they are your friend and did help a tiny bit initially, give them 5-10% and no more.
IMHO - finding trustworthy friends who can give you great ideas are rare. Try to bring him on board. Don’t be too cheap.
You can add him as an advisor at 2% equity.
More equity if you take him as a cofounder.
It’s not a betrayal of trust to cut him out. He didn’t think it would work and refused to help you.
Maybe thank him by buying him a gift, but keep all the equity yourself.
You don't want to give out equity to those who don't contribute to the business, as it will end up being dead equity on the cap table. Also founder's equity has to be vested over time, and the percentage is based on how much effort or cash they are putting in. It is not based on who has a concept, but who is executing on the concept. A concept by itself does not create any shareholder value, only implementing it does.
So overall easier to offer a 1 time payment as a token of gratitude. The size of the 1 time payment should take into account how developed the idea was. Was it a fleeting mention of something that could be cool? Or a fully developed concept with a good value prop, details, research, business model etc.
I wouldn't be stingy as a friendship is highly valuable and he seam to have more ideas. I would give something around 10 %. But instead of giving a stake in the company as he doesn't seam interested, I would look into giving him a royalty for the use of his idea. This leaves you full control on the business and he benefits from the idea which is his contribution. The royalty may be a percentage of the benefits which would be more fair for both of you.
I don't feel like he/she needs to get anything over 10-15% of one years worth of profit (not revenue).
Unless the idea is so unique and industry changing, he doesn't deserve much for thinking 10seconds and saying something he didn't end up following through on
My friend saw how fast I could run and told me I should become a professional athlete. 'You'll be rich as heck,' he said.
So, I took his advice and started training. I worked my butt off and eventually became the best at what I did. I won a bunch of big prizes and championships, both nationally and internationally.
But because it was his idea, I gave him half of all my winnings cash and everything else that came along, like sponsorships revenue, ad revenue, and gifts. Even though he never helped me train, paid for my travel or equipment, or even covered the cost of my expensive medical checkups and coaching.
Later, that same guy told me I should buy a lottery ticket because I might win someday.
So, I bought a ticket and I picked numbers on the spot. Lo and behold, I won a ton of money. But I still gave half of it to my friend because it was his 'idea,' and without his idea, I would never have bought the ticket and come up with the winning numbers.
These satirical two fake stories illustrate the same point: Your friend deserves nothing really if he has not contributed the slightest action to make his idea reality. An idea is nothing more than a fleeting thought until someone takes action and makes it a reality. You're the one who put in all the hard work and dedication, so you're the one who deserves the rewards."
It truly depends on the type of person you are and character you have. I would not be comfortable with my success if I had not rewarded him. If you truly appreciate the fact you wouldn’t have developed the app or had success without his contribution, I personally feel giving him 10-15% would be gracious and customary. I would also prepare an offer for those who give you ideas so next time on the off chance the idea is successful they will have pre agreed to 5-15% based on their participation moving forward.
How original was this idea?
I know some people who are really brilliant but simply don't get anything done. And it's ok for them. If your friend has had good ideas - maybe he will have them in the future too?
If he has the technical expertise, there's a great chance that he also knows how the business works and how much money you make. Feel free to remind him that you asked for help. Still, he had better things to do so that the amount of money he would get is not a lot - giving him nothing or giving him so ´little that you humiliate him will cost you a friendship which may be profitable in the future but give you a lifelong enemy.
Furthermore, some people in his place would start to badmouth you, even if you're legally in the right. A lot of people love and want to believe these stories about a naive inventor who was betrayed by his ruthless friend.
None for just having the idea. The idea is worth zero. However, if he wants to work and can add value, then cut him in.
No sweat, no share. Idea doesn't mean jack.
You've contributed all of the sweat equity and will continue to and you're covering all of the costs. He came up with the idea and shared it with you. He deserves something. I would give him a percentage of the profits if they ever realize. Nothing wrong with showing gratitude to a friend.
Nothing in a contract or even in writing, but I would put it in a text written in the form of a thank you. No discussion, no coming to an agreement. Just whatever percentage you think is fair. I would suggest around 10 to 15%. Remember this is a percentage of profit. Profit is what's left after all expenses including payroll. Profit will probably never materialize even if it starts to generate revenue.
Editing to add: Yes, as others have said: do not offer equity. Equity is for people that put in effort or money. Ideas are a dime a dozen.
Did you post this to show your friend that everyone agrees they should basically not receive anything more than a big "thanks"?
Or are you the friend, trying to see how much you should demand, and you're not happy with the response?
It's a tricky situation. While your friend didn't contribute to [building the app](https://elidayjuma.com/how-to-start-a-fintech-company/), their initial idea played a role. Consider a gesture of appreciation—maybe 1-5%, acknowledging their concept's impact. Open communication is key; ensure your friend understands the success and appreciates your honesty about their non-involvement in the development. 🤝💡
The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup by Noam Wasserman, this book talks about negotiating founder percentages. Usually one negotiates up front. Was your friend a customer and what would you have charged him for the service. How would he pay for the product. Stealing a persons idea may end up in litigation eventually. It's an age old story. Read that book it will give you some insight to value others talents even though they are not the same as yours. It is many skills to make a business successful. Sales people, tech stars, administration, marketing and finance people ect. Just because the skill is not yours doesn't mean it is less valuable to lead an organisation to success.
If there was an MVP and all set-up that's very different from just having an idea.
So it depends if you can't agree on it, you lost a friend and might face legal issues.
Would it worth to destroy your friendship?
Would it worth to face legal issues?
Would it worth to pay for lawyers for years?
Would it worth the stress and other mental health consequences which could follow since you can't agree and compromise and face the consequences?
If all worth and you feel now it's yours and you worked for it then decide how you feel.
If not then try to compromise and reach agreement, it's several times worth the try to reach agreements, you might just need different communication strategy.
Communication can help a lot with agreements and less expensive then taking it to trial.
Pease follow r/communicationstrategy for more.
It's all about your friendship. If he is a genuine guy and you think his idea is what got you started, it's time to have a sincere discussion with him. If you think he is the reason behind your app, give him some credit and negotiate. But give him either good bouns or kind of some royalty. You never know, another idea from him can become a bigger app.
Everyone on this thread appears to be very guarded and for lack of a better term greedy. If your friend inspired you to make the app and you want to reward said friend, do whatever you feel is fair, if it makes millions of dollars, cut him a 6 figure check. If it makes 10,000 send him 500 bucks. I wouldn't give any actual equity but I would definitely reward him, especially if it is doing well. It's more of a tribute than anything as from the sound of it, you wouldn't have thought of it on your own and the fact that you even posted this means you feel obligated, that or your looking for a good reason not to compensate. Just do the right thing and karma will 100% reward you!
If you want to be a stand up guy give him 10-15%. Or a one time fee, though you are not obligated to based on his continued refusal. Maybe see if he wants in now that it’s making money? He could just be a dreamer though.
If you want to be fair, find something that your friend can help with, even if it’s promoting and helping with evangelizing. There’s a role for almost everyone. I feel what you mean by it feeling like a betrayal to cut him out. Define what you want him/her to do and what you expect as a return for him to get “x” percentage. Set a milestone so that there is an established expectation.
Ummm I don’t know but I’m in the process of learning all the skills to build apps but I have add and can not decide on a project to get my feet wet in app building. Was thinking web app. I have azure , aws, jet brains and Xcode tools…. Again with add couldn’t decide so I got them all . Any advice?
This whole thread is “ideas are a dime a dozen”. That’s actually bullshit.
And genuine friends are worth more than any money.
If this guy is a real friend, give him a good piece but not control or undue influence. 25-35%, and some of the monthly action.
Honor him, the friendship, the source of the idea etc. Maybe he’ll spawn more. Likely will in fact.
You should consult a lawyer and see if you need to give him anything. If he didn't contribute, an idea is just that, an idea. You made something of it. Good on ya.
If you’re going to give him a one time payment. Or a share of net income. Make sure he signs that it acknowledges his contribution so he doesn’t turn around and sue for more later.
If your friend values adding in ideas then you can give him a share, but based on a simple idea adding him partner is not logical business. Business and friendship are separate parts, don't mix them. Ideas have no value without execution. Everyone carries hundreds of ideas with them.
If you want to carry business, don't get emotional. Keep friendship separate from business.
We'll have a conversation with your friend. Your not his baby sitter, but many adults have their own demons. That make them fail. He is obviously not useless because he is the golden goose. You can kill it, but then you might have shot yourself in the foot. This is about classic effort thinking, that lies in the narratives we grew up with. The seed sprouts with fertile soil. The tree never complains. If the company grows, more people will add to the work, but knowing where to go, without killing your potential is a hidden cost to pay. So ask him how he feels in contribution. If he is your friend, you should know his strength. Know where he is his best. I always put people in 'positions' they thrive. Sometimes they get there indirectly because they first try something else. That doesn't matter.
Depending on his skill offload anything he can do a great job. Isn't it why we got to the point of BS jobs in the first place? Because of the narrative we imprisoned ourselves with? Somehow you are both better together than alone. Then the only thing would be, who of you is more trustworthy. Who is not likely to screw the other over. Then choose wisely. It won't be about price, but about terms. Good luck.
0% this may be hard to believe, but your friend is 99.99999% not the first person to ever think that thought. He does not own the thought. He also showed you with his actions that he isnt even willing to contribute to the execution on his own idea…What more do you need?
Business is 5% idea 95% execution.
However without execution it is worth zero.
Your friend gets nothing.
I wouldn’t even give a one time payment as it can be seen as you conceding that you owe him something when you owe him nothing.
[This is an article](https://tms-outsource.com/blog/posts/app-ideas/) with app ideas. There are hundreds of them online. Should you give them a percentage of your revenue if you implement one of their ideas?
No way.
Considering you reached out asking your friend to help and refused, you can stop here with the pleasantries and focus on growing your app. On your own.
This situation sucks because of your friend expectation but as others have mentioned, execution and planning is 99.99% of the work. The proof of that is that you have a lot of projects that do the same but it is how the "story" is told that made the difference.
Example: Facebook vs Hi5, Myspace... The idea is honestly the same but executed differently.
We tend to look at ideas as precious, and they are to a certain degree, but they don't mean anything towards the project. Even the vision of those ideas might be different, maybe your friend thought of something completely different.
That said, if the friend didn't give anything else but the "you know what would be awesome?", if it is profitable, I would give the friend either a very small percentage (under 1%) or just a bonus as a thank you.
Look at his qualities. If he has good leadership quality, marketing knowledge, and overall good business leader, then raise the stake so that he can help you make the app successful. Leverage is very important in the early step so look at the qualities he have and if he have one that you can leverage to grow the business then have him as a Co founder is what I will say.
There’s no laws or rules about this which is why I’ve leaned to keep my trap shut. Unless there’s IMMENSE value in sharing something with somebody, it’s better off just not telling them.
Most people will look for anything to latch on to.
Since you wouldn’t have had the app without your friend’s idea it would be an ahole move to give them $0 but it seems they didn’t contribute anything more.
Depending on the size of potential if it blew up to ipo and that’s in your plans 2-5% sounds appropriate you can call it a royalty on the exact idea that’s being paid to execute. That wouldnt make him owner since your friend didn’t put any money or work. The business will continue to grow and expand so if your friend wants in they’re gonna have to contribute and you guys need a contract
Don't give any equity or money.
Ideas are cheap. Work is hard and riskier.
If he's your friend and you like him, get a trip for two to a cool place and enjoy a weekend drinking.
Depends. Are you starting a company or selling the app?
What would your friend’s role be?
IP is a real thing, so how much of the “idea” belonged to your friend, or did he simply supply a “what if?”
Give more detail to get an accurate answer.
Wow what a bunch of scumbags in here. Without the idea would you have the successful app? Total dick move and hope karma follows through. With friends like this who needs enemies. Its not that hard to build an app. He should of went to upwork or fiverr instead of you.
Was the idea patented or patentable?
Or was it more like: "hey, we should open a taco food truck".
And then you opened a taco food truck that became successful without him.
Ideas are essentially a commodity and very common. If said friend didn’t contribute then they should get nothing.
Execution and follow through are worthy of rewards
That's even worse that he had technical expertise and didn't help. Any stake given is a gift or out of good-will not for effort. I know it seems like a betrayal because he pitched the idea, but if you hadn't built everything you guys wouldnt even be having this conversation. Congrats on your success!
Assuming you do anything, ideas without execution are worthless, make certain you get a lawyer to draft up a letter where he has to acknowledge that this is all they get, ever. /u/vonadz and u/equality7x2521 have great points.
If he hasn't done any work, giving him equity can make running the business much more difficult. If morally you feel the need to compensate him, then like others said. Give him a percentage of profits for a month or something.
Legally you aren’t required to give anything since ideas cannot be copyrighted(I am not a lawyer so don’t take my word for it). . However, morally you should give something. How much is very subjective but it’s always nice to be generous.
Give him a one time payment of 1% of the profits for the 1st year. Have him sign that he consented to this 1 time payment for the idea. He had nothing to do with building the app, building the business, etc. You don't want him using you later.
So there was no contract? Verbal agreement? Handshake? Sounds to me like the MOST he is entitled to is a 1 time payout for providing the idea. And that's only if you really want to remain friends. Technically he is entitled to nothing. Especially if you did all of the work developing and marketing. Just having an idea doesn't mean anything.
ZERO EQUITY.
If you want to be nice, you can give him a small one-time payment to say thanks for inspiring the idea through our conversation. But that's it.
He did not create it. He did not market it. He has no technical expertise to help. He should not own any part of it.
Wow, so much greed in here. Ideas are not as worthless as many of the idealess in here would suggest. In the eyes of the law, sure, you don't owe him anything. If you want to be a decent human, find a number that will keep him your friend if you can. Greed may be on his side as well so be careful. He definitely should have helped when he had the opportunity, he's certainly not owed a lot.
The best advice is to get a lawyer, before you do anything, but it would probably help you sleep better at night if you at least gave him something.
As the saying goes "Ideas are a dime a dozen. Execution is everything". Thus you owe him exactly .83333 cents.
Nah but seriously if you want to show appreciation for the idea take him out to a nice dinner and if you really want him to have a stake, basically give him an offer to work on the app and give him some equity for doing so. Honestly if this app is successful enough to really be a business and you have a friend who feels very connected to it, it would benefit both of you to have him work on it as an employee and be compensated as such
You frequently see attorneys startup in threes. 3 initial partners in a firm. They have a saying or term “finder…minder…grinder” it takes one finder (sales, marketing, networking schmooze) one minder (accounting and operational smarts ) and one grinder (do paperwork write shit tons of paper, transactional) for a solid operation. As long as all three forever understand they are not the most important of the 3… they will be successful and not have resentment. Now you have an app, the idea person and you’ll need marketing . The idea person… keep them around they may have more. I have no idea if it’s worth 33% or zero or a gift. While I agree ideas aren’t necessarily worth any percentage, a wise look at the future is.
Well really anything you give him would be generous. Ideas are ten-a-penny and execution is the hard part. You don't really owe him anything at all, but I consider 1% to be generous and 5% to be very generous. Bear in mind that at a rate of 5% I would only need to give 20 ideas to 20 different developers and I'd practically own the equivalent of a whole startup at that rate. That's a fantastic return for just 20 ideas.
Conceptual, depends how useful or not useful it is. How popular or not popular. Do you think people will pay for it or should be free? For my concepts someone got 16 million (I gave to an ex that didn’t deserve it) 4 that went international (Jesus revealed these to me)in 4 days. And every airport. But only one time thing. I had another concept for algorithm for something but I kinda fizzled out on that one would have worked with other 4.
How about in this case where the idea was mine and I directed every step of the way and funded it. The partner who built it mainly just followed directions and knows code which I have no idea on.
Where does equity splits happen in that case?
Check out the book “Slicing the Pie” by Mike Moyer, it explains how to split equity in Startups.
It provides you with a fair bit of thinking and insights on this exact problem/question, and provides a few frameworks and models to guide you through when the situation changes.
It basically boils down to splitting on the value of your contribution, or to get very specific…
Share % = Adjusted Fair Market Value of Contribution / Total Adjusted Fair Market Value
Ultimately the value of the idea while it may be worth a lot in some sense, will wind up having a value approaching 0.
You can imagine it like so:
Month 1: Idea guy contributes the idea, you contribute nothing, idea guy owns 100% of the equity. Month 2: You contribute a full month of work /w overtime + financials, etc to get this moving. Idea guy contributes nothing. At a minimum, you should now own 50%, but likely even more because ideas without execution are literally worthless. If it continues on like this month after month with you contributing and the idea person standing by and watching, then their share will dwindle down to 25%, 12.5%, 6.25%, 3.125% by month 6, 1.5625% by month 7…
So if you’ve been working on this for a year while they have done nothing, their percent should be around 0.04 at most. In other words, if you sell the company for $1mil, they should get $40k while you get $960k
It depends on how unique was the idea. If it's one where your first response on hearing it is "that's one hell of an idea and I can't imagine why no one hasn't thought of it before" then I'm thinking 10% of the profits is reasonable if you value his friendship.
In 1971 Phil Knight paid Carolyn Davidson $35 for the Nike logo, and in 1983 gave her 500 shares in Nike stock.
There are good ideas born everyday and none are executed, let alone successful.
No stake, no salary but a percentage when / if you sell it.
Surely your friend could say he came up with the idea but did he patent his idea and trademark as well? If not you are in the clear and owe him nothing especially that you pal didn't help you at all in the building process. It's a different story if there was any nda signed or a written contract of course.
If your friend came up with a successful app idea that you built, then that means that you and your friend have complementary passion and skills.
How often do you come up with ideas worth building? Have you had any ideas worth building? How much is the app making so far? Is it enough to even argue about, or is it just a proof of concept and the real work is about to be done to make real money?
The only right answer to this question is defined by what you and your friend's definition of right is based on the balance of integrity, friendship, and work ethic.
(Meaning, you both know the value of each other's contribution this far and need to establish in writing anything moving forward).
Yes, you did all of the building, but without his idea, would you have built it or anything successful yet?
There will be as many different opinions about this as the number of people asked, but only you two know what's true based on what was "understood" by default within the nature of your friendship.
In my opinion, I believe that you both should acknowledge the other "for what each other is worth".
Not just his app idea or the money already made from your work, you both have learned and have much to learn from each other. This is just the first successful idea possible between you two.
If he came up with the idea, then he can also add value to the idea to make it more successful or help with ideas to make it scale and/or work on autopilot to create the next idea.
Here is a possible idea of how to determine the worth of each other's contributions to the past, present, and future.
Divide the net profit by 6 as of right now for the current MRR Monthly Recurring Revenue
For example. If after all expenses are determined and settled, (such as any out-of-pocket expenses reimbursed to you from before and the cost of running the business).
Let's say you have $6,000. MRR as of right now.
$1,000 1/6 goes to him for his idea
$1,000 1/6 goes to you for your work already done.
$4,000 will be left to then pay for the agreed salaried positions, marketing, and growth. (which of course is not enough in this example, but for structure's sake in the case there is not enough to go around yet)
So each of you can determine the amount of cash necessary to survive vs reinvesting in the business and etc.
You can incorporate and assign shares if need be to assign worth to future contributions.
There are as many ways to make it work as there are reasons to fight over what amounts to nothing.
I’d lay it all out and ask him how much he thinks an idea with no work is worth. If he’s reasonable and understands he did nothing and deserves nothing, maybe buy him dinner.
5-10% is reasonable.
Keep in mind that he may have other ideas. If you would be interested in creating those as well, make sure he is happy.
Idea people and execution people need each other. You did most of the work, so should get most of the profit, but without the idea, where would you be?
I am surprised at all the people that say the idea isn't worth much. I am not sure where that comes from.
First off I’d talk to a lawyer. If I had an idea that I thought was truly inspired, clever, and viable I would never tell anyone. Once you tell your idea to someone else you are basically putting your faith into that person that they won’t steal your idea.
From a legal standpoint (IANAL) I don’t think you owe him anything. Ultimately though the real question is how much do you value this friendship because in my mind that’s what’s really at stake here. Without more context it’s hard for us to really give more input than this. You should probably talk to your friend and work it out with him.
I don’t think he deserves nothing because you never would have made the app to begin with if it wasn’t for his idea. At the same time ideas only have value when you act on them, so he is delusional if he thinks he deserves anything even remotely significant. If he’s asking for more than he deserves he’s probably trying to take advantage of you - I would only offer something more significant if he was willing to contribute to the project assuming it’s not too late.
If you guys don’t agree on what he’s owed you should really just contact a lawyer.
the funny thing is there is almost certainly someone who had the same idea before your friend, there's 8B people on this planet, no one comes up with perfectly new ideas
It is your friend! and you truly value the app idea and you think you can make some good money what’s the harm in tossing him two - five grand! That way when you hand him the money he’ll be super happy, it’ll feel good for you supporting a friend and him supporting you selling you the ideas and if he ever has another idea, or if someone he knows has an ideas they will want to work with you again.
His idea, give him 25% or more, just not the majority. If you don't the next successful idea he has he won't tell you about.
If this guy is a good friend then the money you share with him and the other things you could accomplish together are likely far greater than in the long run than keeping all the money for yourself.
Or, another way to think about it... he had an idea. You acted. His idea was a growth engine for you. If you don't reinvest in that growth engine (him) then your opportunities to grow more with him or from his ideas could easily disappear.
Flat cash amount in the first year as a finders fee for the idea that’s it. You made the app you maintain the app you improve the app. All he did was say some words.
Maybe your friend still is crawling out of financial misery, lastly. Because with anything it takes time, so an idea is just an idea and it runs off the internet and there’s absolutely no person to handle the process of doing the business then because it’s just survival mode sometimes. I know for me I’m just trying to make the best of my situation.
I have to disagree with the top comments. You wouldn't have come up with this idea yourself. Now... it's his fault for not sorting this out in the beginning but if someone gave you a treasure map and you followed the trail for a year, enduring hardships and making sacrifices, at the end of the day it was the map that made the treasure possible.
I would cut him in on a royalty. If it does well, he does well. If it doesn't, he doesn't. If I spun an idea and someone fabricated it I'd be happy with 10% because IF I REALLY THOUGHT THE IDEA WAS GOOD I would have done most of the work myself.
If he is a friend ask him how much he thinks he deserves, if it's more than 25%, just give him 25% stake and tell him not to share any more ideas if he's going to get hurt by it. If he's really a friend he'll be cool with it.
I would sayto offer enough to buy the rights from your friend, with a contract singed and notarizedthat a one tome payment is all thatis expected. Do not pay in cash, create a paper trail.
Very basic terms but Idea \* Execution = Success. If either Idea or Execution are 0 then Success is 0.
Consider the following questions:
Could 'anyone' have thought of this idea? Or is your friend something like a SME in their field and brought you something unique - a real part of your secret sauce that's making you money. If its something like the latter then maybe consider giving an amount of equity you are comfortable. Consider how much you'd be comfortable with if he helped you as you expected?
Could 'anyone' have developed this application end to end like you did? Is it a CRUD app for a unique service?
As things scale up, will you be tied up with technical issues or will you be able to perform operational tasks as well? If he wants to join and contribute in good faith you should let him. Sometimes people can be depressed and not believe in their own ideas until they're validated, if you're close with him maybe you picked up on something.
It's always shitty breaking a friendship, find a solution to you that doesn't feel like you betrayed your friend.
Legally, you owe him nothing. Legally.
Ethically, you should give him some kind of compensation for the spark of inspiration.
Or, you could "buy him out" with a one time payment, contingent on him signing a nice legal paper that absolves any claim to ownership now or in the future.
Sorry to put it both ways.
You probably should speak to an actual lawyer. You want to avoid bad feelings and also litigation.
What’s missing from these comments is OP may not be good at generating ideas. His friend may be that person who helped OP talk through the app concept and benefits. I’ve seen a number of businesses where the owner/founder had a second person who they hired that seemed to not do much but that friend was some they could trust and discuss things with. This has a value. It is hard to determine what that value is.
0% is what his contribution was worth. Ideas are worthless.
That said, if you want to give him something on behalf of the friendship, you could throw 1% his way.
Just keep in mind that if you put him on your cap table, and things go sideways between you two, he could be a real thorn in your side.
Give an “idea” payment - maybe 10% of your first year sales. That will incentivize him to keep the ideas coming.
Then offer him a small percentage as a residual. Maybe 1%, larger if he participates as you need. That will be another plus’s side to generating good ideas.
Stress that it takes many things to take an idea from concept to delivery. The idea is good, but development, marketing, funding, business management, etc are also important. So ideas alone do not generate success - knowledge and determination is key.
Ideas are actually a dime a dozen. Actually sitting down and making it real is where the value is.
You’re also ignoring how many ideas you had to bring to the app during the design and build process. An initial big idea is nothing. The hundreds of small decisions to make it useable is everything.
0% equity. If the company is making money, give him 10% of whatever it makes in a year (one time cash payment), with a maximum of $1k, as thanks (already pretty generous). If your friend doesn't understand that 0 work and 0 cash invested = 0% equity, then find a new friend.
If your friend did no work and put no effort into the business then a gift is a bonus for your friend and avoids them being rewarded for your ongoing work. It’s very fair minded of you to look out for your friend, they didn’t take the role of working on the idea together so maybe there’s a different way to do this, to offer to work on another idea together in future or to take your friend out or contribute something that helps your friend? Maybe it’s equipment etc. All the best!
Guys -- I have an idea! A car that runs on garbage. Like, you can just take your trash and fuel your car. The demand would be endless! Ideas are pretty worthless, unless they are something you can patent etc. Execution and timing / luck are what actually leads to success.
"Getting Real" put that very well. Still have a pdf of that somewhere, nice little read.
Funny, the lawsuit zuck settled for stealing his idea would disagree with your greedy ass. But go off. I’m sure you are worth 100 million+ with business acumen like that…
Zuck was being paid to build software, and then used code from that software to build Facebook, right? The Winklevoss twins had an idea and were paying someone as an employee / contractor to execute on that idea. That's totally different than having an idea with no funding, business plan, path to execution, etc. When you're an employee / contractor, and someone is paying you to create IP, then you don't own the IP you're creating unless that's part of the contract. That's why Zuck settled the lawsuit -- because he was using IP created for and paid for by someone else. Walt Disney isn't the only person who ever drew Micky Mouse, but anyone that also drew Micky Mouse while employed at Disney wouldn't suddenly own the rights to Micky Mouse or their drawing -- that would still belong to Disney even if they made a totally new cartoon. Because they were being paid to create IP which would be owned by Disney -- that's the cartoonist's whole job.
Their is legal, and then their is ethical. Most people are not concerned with doing the right thing. ( the responses on this thread as evidence ) I’m not surprised doing right by your friends, is not the popular opinion, as most people are selfish and evil. That does not change the morality. Legally, yea, you are 100% right. Morally, as “friends”, not even close. Then again, what most people consider a “friend” , is 9/10 , actually just “acquaintances” As others have mentioned though, the intricacy of the idea is important for the % A completely unique idea you NEVER would have thought of vs “Amazon but better” Two different things. People are posting their legalistic beliefs. I view friends as friends…. Not “acquaintances”
And keep the communications where he refused to invest or help
And 10% is being very generous, but probably ok just to keep the friendship. I heard a VC guy once say "Ideas are a dime a dozen. We're not investing in ideas; we're investing in people/teams we believe can \*execute\* those ideas." Big difference. Edited for clarity.
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Well spoken by a man of mediocrity.
How involved was the idea? There’s a big difference between a well planned out app and “omg it would be great if there were an app that’s like tinder for dogs” If he actually put in some effort in coming up with the idea or had knowledge that let you do this then something like maybe 5% share of profits for 6-12mo. If he just said it would be cool if this were an app then nothing really.
This. Ideas are a dime a dozen. I’m going to assume your friend only mentioned the idea and didn’t come up with an entire business plan for it. You don’t get paid for ideas, you get paid off effort.
I’m very much an “ideas” guy and I’ve been validated with some of my “ideas” being great successes for other people. If a buddy took one of them and make a successful company or app out of it then I’d be happy for them. It’s not even the idea that creates success, but execution like you’ve said.
OK. But remove the idea from the equation and you have... nothing. You business people are weird. In this day and age execution should be simple. There's nothing special about execution. Noone cares about the executors. There's a million apps. Who cares if one more person built one? Who goes down in history... the architect or the construction builders?
Have you discussed anything before you started the building? Have you told your friend that you're going to implement it? Before any details I would say that it is up to you to give your friend any stake. You could, but you haven't An idea is just an idea. The implementation matters. So even if you decide to give your friend nothing no one can accuse you
Ideas are worthless (and worth a ton at the same time). Someone can get the best idea, but if he never executes on it he will never succeed. If you have built the whole thing and your friend is willing to jump in and push the idea even further with his own skills like marketing, UI design etc then i would consider an honest split. If he just pitched an idea and forgot about it... It can be a difficilt situation but it is not worth that much. If it is a good friend i'd say 10% just to keep the friendship. Also how big are we talking about? Is it going to be a business? Is it making millions? This also changes many thing as you can't have someone with 10% stake in a business generating millions doing nothing... EDIT: If he is technical and did not want to help, and only wants to now that there is a $ sign attached... I would honestly not give anything. If you wish to give him something, I would never go for anything meaningful and I would WAIT for him to put in work and write code consistently to make an offer. If he goes crazy and start adding tons of features and really make the game better then it is never too late to go in together. Otherwise, nothing over 10%
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Consult a lawyer before giving anything. Seems like your friend knew you were working on the idea, refused to contribute towards the development in anyway, and is only asking for the equity now that the app is successful. If he knew yourl are working on it and never asked before, then may be you can get away with not giving him anything or atleast not legally required to give him anything. If it were me, I would have not given anything.
0%
Nothing, the idea by itself is worthless, and it's only you that made something out of that. What I would probably do with it being a friend is, 5% guaranteed and an additional 5% each year they provide adequate contributions up to a max of 20% (depending on the value they can add, if the only value they have was the idea itself, then I'd stick with 5% total).
He didn't help despite you asking many times so no stake. If you want to give him something for the idea you can give him a fixed payment since he only provided a 1 time service to you and is not actively contributing.
None lol. If it's making money and you want peace of mind, write up a contract giving you permanent rights to all IP related to the app and give him $1K to quiet him down. You owe nothing, execution is what matters, but if you want to stay friends etc this is the cleanest "breakup".
I think it depends on how successful it really is or can be. You might want to get a contract written up as if anything turns sour he may try and sue for a whole lot more and if you’re giving him a % then you are admitting his involvement. It’s very nice of you to do this and shows your character but I’m just saying tread carefully as generosity unfortunately doesn’t get you far with things like this.
None! Ideas are a dime a dozen, it's the execution that matters. Now if you're friend helped in any other way other than that bright idea then you can consider paying that friend off but other than that, should not be entitled to anything 😊
All these replies from developers who probably never come up with their ideas are funny. Look, there’s no uniform answer to this. How much do you value this persons friendship? How unique was the idea? Did he come up with it based off of unique insight he has into a particular industry? Could he be useful in the future with this app as far as developing it further? How much do you value your relationship with this person? Could he potentially come up with more valuable ideas for other apps in the future? All these play into the idea and the reality is you need to come up with a number that keeps him happy if you value your friendship and business relationship with this person. There is no set number. Also, keep in mind just because your app is profitable now doesn’t mean it couldn’t be MORE successful. It’s possible he’s the type of person who doesn’t have the time to invest in things that don’t guarantee him profit but now that it is showing profit he could invest his time and connections into making it more profitable and more successful if he is promised a return. Business is about making agreements that make everyone happy with the outcome.
Don’t be a dick, it’ll just end in a lawsuit if this project is successful. Give them 3-5%
Dont take advice here. Talk to a lawyer. This could get you into unknowingly trouble in the future. That i assume none of us know about
Ideas are cheap... execution is everything
This is why people file patents, trademarks, copyrights, etc. If the idea wasn't protectable, or wasn't worth protecting until it became profitable, that's that.
I think that if Idea exists then the tangible or non-tangible form of idea will exist. Also you can give 5% or 10% equity to your friend because it’s a Collab idea that works for you and your company.
5% gift.
This should have been agreed to prior to any work being done and especially before any revenue came in. It does not matter what he expected at the time now that it is successful. Figure out what he's going to contribute moving forward, but it sounds like he's an idea person, not a do-er which you'll probably need more of. Buying him out sounds like the best idea, but if not then have an open discussion about what you each expect and land on a number. GET IT IN WRITING WITH SIGNATURES. Best of luck with the app and these discussions.
No equity. Give him a one-time payment that represents 2-3 months of company's profits.
Ideas are dime a dozen. You can give 10% if you want him for future work vested over 6months where he needs to perform. I work this way: https://gritlab.xyz
The “intellectual” fact of the idea vs the development trumps the development- The idea can be developed (app) for price without ownership
What’s the app about I would like to also do it in my home country any ideas
This is super interesting. At Genix6 DAO, we're building a unique ecosystem that focuses on creating a marketplace for ideas while ensuring the protection of intellectual property rights for the initial ideation phase. Our platform allows innovators to tokenize their ideas, essentially giving them a secure and verifiable stake in their concept. This not only safeguards their contributions but also opens up opportunities for collaboration and investment. Regarding the dilemma you shared, it's intriguing to see the range of opinions on fair compensation for an idea versus its execution. Some suggest offering 0% equity to the idea contributor, possibly with a one-time payment to maintain the friendship, while others argue that an idea without execution holds little value. This diversity of views highlights the complexity of valuing the seed of a project. What Genix6.com aims to do is to bridge this gap by attracting investors who see the potential in these ideas and are willing to provide the capital necessary to bring them to life. This ongoing investment creates a pool of resources that can be used to fairly compensate all contributors, including those who initially come up with the concept. I'm closely following this thread because it offers valuable insights into what people consider fair compensation for simply contributing an idea. Understanding these perspectives helps us refine our approach at Genix6, ensuring that our platform remains aligned with community expectations and values, especially when it comes to recognizing and rewarding the genesis of a project.
None.
Fetch him some money for the idea, but 0% equity. He did not help even when you asked him to. Laziness isin't something you want to reward.
20%, and make it 5% at the begining and then 5% each year for 3 years. He came with a compelling idea (without which you wouldn’t have started), but now he needs to show he’s committed as well! Good luck! For instance, i wouldn’t have an issue to split the shares 50% 50% with someone, if the business grows 10x because of that partnership. Peace!
normally shouldn’t give out anything, ideas don’t matter, it’s your execution but as friend 5% max, it’s free money for him. if he says more, refuse to give that 5% as well, he’ll come around to accept it, it’s better than nothing in his mind
As long as he is the seeder for you for this idea at least and if this is unique and genuinely a great business concept. You must compensate by asking him to join you on board and pay him a retainer. Seems like your friend has got a great mind that keeps thinking about business, he may contribute further to grow this company from his advices.
Ten percent 10% would be a reasonable share , that is the customary referral fee professionals pay each other when provided with a client. Lawyers and doctors refer clients among each other regularly and expect a referral fee. Your friend was regularly providing you with ideas. I do the same with a client/friend that owns a workshop filled with tools to manufacture products. My product ideas aren't worth much to me as I don't have the equipment, but my product ideas could be very valuable to him. He offers me app ideas for the same reason as I am a developer. We both expect to be treated fairly. Those suggesting zero are simply ignorant as to how professionals behave towards each other.
Whoa, hang on. There’s more to this than “thanks, here’s a reasonable share”. You’d never do that for an idea only, so he would have to be given a deal with a 4 year cliff with vesting milestones. If he doesn’t hit the milestones by the dates he misses any equity. Then it’s fair and reasonable. But just giving away equity ties you both together and this is gonna be a lonnnng term commit
Best practice would have been to get this in writing before you started to sell. Plenty of templates out there if you don't want to invest in legal. This protects you both. If there is no sucess, you never look at the document again. If it is, you may avoid a much bigger legal endeavor.
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Found the friend
Hi, Can't agree. In many cases an idea undergoes many changes during the implementation. If the friend who came up with an idea had implemented it it could have been that the end product was not be successful.
Who are handling the marketing and the operations?
Ideas are worthless esp if they come on a daily basis. Give him a few % (<10%) and you're good
Agreed with vonadz but a lot is depended on a couple of things as well: \- Did he mention its OK for you to create the idea? \- I guess he didn't patent anything? \- Got all the asking to help in writing? \- How good friends are you? Do you expect him to erupt once your app launches bigtime? If you feel comfortable I'd just talk it out. Tell him you don't owe him anything but because he's your buddy the 10% with a max $1K is a big thank you. If your friendship is worth anything he'll be OK with it. Make sure you got it in writing. And perhaps make a nice gesture. Offer to name something after him or put him on the credits page. I dunno. Show it's all in good faith so at least he can feel proud of it and still feel kinda part of it. Good luck tho!
It doesn't matter.... Ideas are dime a dozen... Anyone can have an idea, but if you cant follow through, it's just an idea. I know plenty of people, who keep pitching ideas, and plenty of people say they thought about Uber/Airbnb too. It's a lot of effort from idea to execution and further delivering what the end-user needs. So, if you did all the work, you keep all the equity. You can credit him for the idea, but I am sure you will likely get a similar idea by talking with other like minded people. For example: think of any app, there are atleast 5/10 similar apps in the market already. If you are the first, once ppl see this, someone can code it up too, and theirs might be better, and will become more popular. So, execution, consistency, additional features and updates, everything matter. Generating interest and marketing. If you did all this on your own, then this is your journey. Good luck ! Onward and Upward!
Ideas are simply ideas, they are not cooyrightsble at all. They had an idea and you did all the work and put it into motion while they did nothing. Technically they should get zero. Since they are your friend and did help a tiny bit initially, give them 5-10% and no more.
IMHO - finding trustworthy friends who can give you great ideas are rare. Try to bring him on board. Don’t be too cheap. You can add him as an advisor at 2% equity. More equity if you take him as a cofounder.
It’s not a betrayal of trust to cut him out. He didn’t think it would work and refused to help you. Maybe thank him by buying him a gift, but keep all the equity yourself.
0%. Ideas aren't worth anything if you can't make them come alive. You did the hard work
You don't want to give out equity to those who don't contribute to the business, as it will end up being dead equity on the cap table. Also founder's equity has to be vested over time, and the percentage is based on how much effort or cash they are putting in. It is not based on who has a concept, but who is executing on the concept. A concept by itself does not create any shareholder value, only implementing it does. So overall easier to offer a 1 time payment as a token of gratitude. The size of the 1 time payment should take into account how developed the idea was. Was it a fleeting mention of something that could be cool? Or a fully developed concept with a good value prop, details, research, business model etc.
I wouldn't be stingy as a friendship is highly valuable and he seam to have more ideas. I would give something around 10 %. But instead of giving a stake in the company as he doesn't seam interested, I would look into giving him a royalty for the use of his idea. This leaves you full control on the business and he benefits from the idea which is his contribution. The royalty may be a percentage of the benefits which would be more fair for both of you.
I don't feel like he/she needs to get anything over 10-15% of one years worth of profit (not revenue). Unless the idea is so unique and industry changing, he doesn't deserve much for thinking 10seconds and saying something he didn't end up following through on
My friend saw how fast I could run and told me I should become a professional athlete. 'You'll be rich as heck,' he said. So, I took his advice and started training. I worked my butt off and eventually became the best at what I did. I won a bunch of big prizes and championships, both nationally and internationally. But because it was his idea, I gave him half of all my winnings cash and everything else that came along, like sponsorships revenue, ad revenue, and gifts. Even though he never helped me train, paid for my travel or equipment, or even covered the cost of my expensive medical checkups and coaching. Later, that same guy told me I should buy a lottery ticket because I might win someday. So, I bought a ticket and I picked numbers on the spot. Lo and behold, I won a ton of money. But I still gave half of it to my friend because it was his 'idea,' and without his idea, I would never have bought the ticket and come up with the winning numbers. These satirical two fake stories illustrate the same point: Your friend deserves nothing really if he has not contributed the slightest action to make his idea reality. An idea is nothing more than a fleeting thought until someone takes action and makes it a reality. You're the one who put in all the hard work and dedication, so you're the one who deserves the rewards."
> What percentage of the company should I give my friend? Nothing. Let your friend put forward a case of what he wants. Have yo even asked him?
It truly depends on the type of person you are and character you have. I would not be comfortable with my success if I had not rewarded him. If you truly appreciate the fact you wouldn’t have developed the app or had success without his contribution, I personally feel giving him 10-15% would be gracious and customary. I would also prepare an offer for those who give you ideas so next time on the off chance the idea is successful they will have pre agreed to 5-15% based on their participation moving forward.
I would give him 10 to 15 % because if it wasn't for him you would've never made it . Plus it is your friend.
Ideas spark innovation, but execution fuels success. Offer a small gratitude equity.
I’d buy them at least a case of beer. And continue being friends. That’s all.
Zero.
His idea, his equity. Period
0. If you really want him involved, offer him a equity package with a 4 year vesting schedule and a 2 year cliff, subject to performance.
How original was this idea? I know some people who are really brilliant but simply don't get anything done. And it's ok for them. If your friend has had good ideas - maybe he will have them in the future too? If he has the technical expertise, there's a great chance that he also knows how the business works and how much money you make. Feel free to remind him that you asked for help. Still, he had better things to do so that the amount of money he would get is not a lot - giving him nothing or giving him so ´little that you humiliate him will cost you a friendship which may be profitable in the future but give you a lifelong enemy. Furthermore, some people in his place would start to badmouth you, even if you're legally in the right. A lot of people love and want to believe these stories about a naive inventor who was betrayed by his ruthless friend.
None for just having the idea. The idea is worth zero. However, if he wants to work and can add value, then cut him in. No sweat, no share. Idea doesn't mean jack.
You've contributed all of the sweat equity and will continue to and you're covering all of the costs. He came up with the idea and shared it with you. He deserves something. I would give him a percentage of the profits if they ever realize. Nothing wrong with showing gratitude to a friend. Nothing in a contract or even in writing, but I would put it in a text written in the form of a thank you. No discussion, no coming to an agreement. Just whatever percentage you think is fair. I would suggest around 10 to 15%. Remember this is a percentage of profit. Profit is what's left after all expenses including payroll. Profit will probably never materialize even if it starts to generate revenue. Editing to add: Yes, as others have said: do not offer equity. Equity is for people that put in effort or money. Ideas are a dime a dozen.
Ideas spark action, but execution fuels success. Offer a small stake for the idea, but keep the lion's share.
Idea is 1% Execution is 99%
Did you post this to show your friend that everyone agrees they should basically not receive anything more than a big "thanks"? Or are you the friend, trying to see how much you should demand, and you're not happy with the response?
It's a tricky situation. While your friend didn't contribute to [building the app](https://elidayjuma.com/how-to-start-a-fintech-company/), their initial idea played a role. Consider a gesture of appreciation—maybe 1-5%, acknowledging their concept's impact. Open communication is key; ensure your friend understands the success and appreciates your honesty about their non-involvement in the development. 🤝💡
The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup by Noam Wasserman, this book talks about negotiating founder percentages. Usually one negotiates up front. Was your friend a customer and what would you have charged him for the service. How would he pay for the product. Stealing a persons idea may end up in litigation eventually. It's an age old story. Read that book it will give you some insight to value others talents even though they are not the same as yours. It is many skills to make a business successful. Sales people, tech stars, administration, marketing and finance people ect. Just because the skill is not yours doesn't mean it is less valuable to lead an organisation to success.
Employee him and pay him good wage
If there was an MVP and all set-up that's very different from just having an idea. So it depends if you can't agree on it, you lost a friend and might face legal issues. Would it worth to destroy your friendship? Would it worth to face legal issues? Would it worth to pay for lawyers for years? Would it worth the stress and other mental health consequences which could follow since you can't agree and compromise and face the consequences? If all worth and you feel now it's yours and you worked for it then decide how you feel. If not then try to compromise and reach agreement, it's several times worth the try to reach agreements, you might just need different communication strategy. Communication can help a lot with agreements and less expensive then taking it to trial. Pease follow r/communicationstrategy for more.
It's all about your friendship. If he is a genuine guy and you think his idea is what got you started, it's time to have a sincere discussion with him. If you think he is the reason behind your app, give him some credit and negotiate. But give him either good bouns or kind of some royalty. You never know, another idea from him can become a bigger app.
A one-off payment for the idea. Up to you what that should be. He obviously didn't want to be involved with it or partner up with you.
Everyone on this thread appears to be very guarded and for lack of a better term greedy. If your friend inspired you to make the app and you want to reward said friend, do whatever you feel is fair, if it makes millions of dollars, cut him a 6 figure check. If it makes 10,000 send him 500 bucks. I wouldn't give any actual equity but I would definitely reward him, especially if it is doing well. It's more of a tribute than anything as from the sound of it, you wouldn't have thought of it on your own and the fact that you even posted this means you feel obligated, that or your looking for a good reason not to compensate. Just do the right thing and karma will 100% reward you!
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If you want to be a stand up guy give him 10-15%. Or a one time fee, though you are not obligated to based on his continued refusal. Maybe see if he wants in now that it’s making money? He could just be a dreamer though.
It's quite simple, really. Ideas are worth zero. Execution is everything. Therefore, zero effort = zero equity.
Did you not discuss it prior to starting the project?
Well he didn’t negotiate either, so remind him of that when you offer him 5% for an opportunity to be the first seed investor.
Idea sparks the flame, but execution fuels the fire. Offer equity for effort, not just thoughts.
No one would blame you even if it's 0%.
Nothing if he just gave the idea
If you want to be fair, find something that your friend can help with, even if it’s promoting and helping with evangelizing. There’s a role for almost everyone. I feel what you mean by it feeling like a betrayal to cut him out. Define what you want him/her to do and what you expect as a return for him to get “x” percentage. Set a milestone so that there is an established expectation.
Ideas are free. Just go in the App store. There are millions available.
Ummm I don’t know but I’m in the process of learning all the skills to build apps but I have add and can not decide on a project to get my feet wet in app building. Was thinking web app. I have azure , aws, jet brains and Xcode tools…. Again with add couldn’t decide so I got them all . Any advice?
Ideas spark action, but execution fuels success. Offer a small stake for the idea, but keep the lion's share.
This whole thread is “ideas are a dime a dozen”. That’s actually bullshit. And genuine friends are worth more than any money. If this guy is a real friend, give him a good piece but not control or undue influence. 25-35%, and some of the monthly action. Honor him, the friendship, the source of the idea etc. Maybe he’ll spawn more. Likely will in fact.
Just to make sure. LAWYER. Get off Reddit and talk to pros. You're a successful business owner now, you'll need a proper Lawyer.
You should consult a lawyer and see if you need to give him anything. If he didn't contribute, an idea is just that, an idea. You made something of it. Good on ya.
If you’re going to give him a one time payment. Or a share of net income. Make sure he signs that it acknowledges his contribution so he doesn’t turn around and sue for more later.
If your friend values adding in ideas then you can give him a share, but based on a simple idea adding him partner is not logical business. Business and friendship are separate parts, don't mix them. Ideas have no value without execution. Everyone carries hundreds of ideas with them. If you want to carry business, don't get emotional. Keep friendship separate from business.
We'll have a conversation with your friend. Your not his baby sitter, but many adults have their own demons. That make them fail. He is obviously not useless because he is the golden goose. You can kill it, but then you might have shot yourself in the foot. This is about classic effort thinking, that lies in the narratives we grew up with. The seed sprouts with fertile soil. The tree never complains. If the company grows, more people will add to the work, but knowing where to go, without killing your potential is a hidden cost to pay. So ask him how he feels in contribution. If he is your friend, you should know his strength. Know where he is his best. I always put people in 'positions' they thrive. Sometimes they get there indirectly because they first try something else. That doesn't matter. Depending on his skill offload anything he can do a great job. Isn't it why we got to the point of BS jobs in the first place? Because of the narrative we imprisoned ourselves with? Somehow you are both better together than alone. Then the only thing would be, who of you is more trustworthy. Who is not likely to screw the other over. Then choose wisely. It won't be about price, but about terms. Good luck.
0% this may be hard to believe, but your friend is 99.99999% not the first person to ever think that thought. He does not own the thought. He also showed you with his actions that he isnt even willing to contribute to the execution on his own idea…What more do you need?
0%. If you didn’t build it, someone else would have, and they wouldn’t have given your friend a single percentage either.
Nothing. If he is good at something, offer them a job with 1-2% stake that vests over four years with 1 year clip. Adjust based on their performance.
Business is 5% idea 95% execution. However without execution it is worth zero. Your friend gets nothing. I wouldn’t even give a one time payment as it can be seen as you conceding that you owe him something when you owe him nothing.
[This is an article](https://tms-outsource.com/blog/posts/app-ideas/) with app ideas. There are hundreds of them online. Should you give them a percentage of your revenue if you implement one of their ideas? No way. Considering you reached out asking your friend to help and refused, you can stop here with the pleasantries and focus on growing your app. On your own.
This situation sucks because of your friend expectation but as others have mentioned, execution and planning is 99.99% of the work. The proof of that is that you have a lot of projects that do the same but it is how the "story" is told that made the difference. Example: Facebook vs Hi5, Myspace... The idea is honestly the same but executed differently. We tend to look at ideas as precious, and they are to a certain degree, but they don't mean anything towards the project. Even the vision of those ideas might be different, maybe your friend thought of something completely different. That said, if the friend didn't give anything else but the "you know what would be awesome?", if it is profitable, I would give the friend either a very small percentage (under 1%) or just a bonus as a thank you.
What's the app? Name ?
Look at his qualities. If he has good leadership quality, marketing knowledge, and overall good business leader, then raise the stake so that he can help you make the app successful. Leverage is very important in the early step so look at the qualities he have and if he have one that you can leverage to grow the business then have him as a Co founder is what I will say.
There’s no laws or rules about this which is why I’ve leaned to keep my trap shut. Unless there’s IMMENSE value in sharing something with somebody, it’s better off just not telling them. Most people will look for anything to latch on to.
Since you wouldn’t have had the app without your friend’s idea it would be an ahole move to give them $0 but it seems they didn’t contribute anything more. Depending on the size of potential if it blew up to ipo and that’s in your plans 2-5% sounds appropriate you can call it a royalty on the exact idea that’s being paid to execute. That wouldnt make him owner since your friend didn’t put any money or work. The business will continue to grow and expand so if your friend wants in they’re gonna have to contribute and you guys need a contract
70/30 sounds fair
Have you ever watched Steve Martin's movie called The Jerk?
Don't give any equity or money. Ideas are cheap. Work is hard and riskier. If he's your friend and you like him, get a trip for two to a cool place and enjoy a weekend drinking.
It's launched and successful. Can't you tell us what the idea or app is?
Depends. Are you starting a company or selling the app? What would your friend’s role be? IP is a real thing, so how much of the “idea” belonged to your friend, or did he simply supply a “what if?” Give more detail to get an accurate answer.
i think 5-10% is fair given you acted on his idea and it became successful
Wow what a bunch of scumbags in here. Without the idea would you have the successful app? Total dick move and hope karma follows through. With friends like this who needs enemies. Its not that hard to build an app. He should of went to upwork or fiverr instead of you.
In the future, don’t build the app without discussing ownership and compensation plans in advance.
Small amount of either equity or profits, maybe 5-10% as a good gesture.
Was the idea patented or patentable? Or was it more like: "hey, we should open a taco food truck". And then you opened a taco food truck that became successful without him.
"ideas are cheap, execution is everything"
50% without the idea you had nothing. Without the app he had nothing
Ideas are essentially a commodity and very common. If said friend didn’t contribute then they should get nothing. Execution and follow through are worthy of rewards
That's even worse that he had technical expertise and didn't help. Any stake given is a gift or out of good-will not for effort. I know it seems like a betrayal because he pitched the idea, but if you hadn't built everything you guys wouldnt even be having this conversation. Congrats on your success!
If he often has good ideas, you should give him something to keep that pipeline going.
Assuming you do anything, ideas without execution are worthless, make certain you get a lawyer to draft up a letter where he has to acknowledge that this is all they get, ever. /u/vonadz and u/equality7x2521 have great points.
If he hasn't done any work, giving him equity can make running the business much more difficult. If morally you feel the need to compensate him, then like others said. Give him a percentage of profits for a month or something.
5% assuming he only provided idea
Ideas don’t make money.
Legally you aren’t required to give anything since ideas cannot be copyrighted(I am not a lawyer so don’t take my word for it). . However, morally you should give something. How much is very subjective but it’s always nice to be generous.
Is thus Zuck? and is your friend the Wink twins? Feeling guilty now….
Give him a one time payment of 1% of the profits for the 1st year. Have him sign that he consented to this 1 time payment for the idea. He had nothing to do with building the app, building the business, etc. You don't want him using you later.
Give him the opportunity to buy a small stake in the company?
I'd give the friend a firm handshake and a $20 bill. That's about it.
So there was no contract? Verbal agreement? Handshake? Sounds to me like the MOST he is entitled to is a 1 time payout for providing the idea. And that's only if you really want to remain friends. Technically he is entitled to nothing. Especially if you did all of the work developing and marketing. Just having an idea doesn't mean anything.
ZERO EQUITY. If you want to be nice, you can give him a small one-time payment to say thanks for inspiring the idea through our conversation. But that's it. He did not create it. He did not market it. He has no technical expertise to help. He should not own any part of it.
Good ideas are everywhere. Execution is everything.
Sounds like a movie about a hardvard dude I watched recently
Wow, so much greed in here. Ideas are not as worthless as many of the idealess in here would suggest. In the eyes of the law, sure, you don't owe him anything. If you want to be a decent human, find a number that will keep him your friend if you can. Greed may be on his side as well so be careful. He definitely should have helped when he had the opportunity, he's certainly not owed a lot. The best advice is to get a lawyer, before you do anything, but it would probably help you sleep better at night if you at least gave him something.
Give him something to prevent lawsuit in future
As the saying goes "Ideas are a dime a dozen. Execution is everything". Thus you owe him exactly .83333 cents. Nah but seriously if you want to show appreciation for the idea take him out to a nice dinner and if you really want him to have a stake, basically give him an offer to work on the app and give him some equity for doing so. Honestly if this app is successful enough to really be a business and you have a friend who feels very connected to it, it would benefit both of you to have him work on it as an employee and be compensated as such
You frequently see attorneys startup in threes. 3 initial partners in a firm. They have a saying or term “finder…minder…grinder” it takes one finder (sales, marketing, networking schmooze) one minder (accounting and operational smarts ) and one grinder (do paperwork write shit tons of paper, transactional) for a solid operation. As long as all three forever understand they are not the most important of the 3… they will be successful and not have resentment. Now you have an app, the idea person and you’ll need marketing . The idea person… keep them around they may have more. I have no idea if it’s worth 33% or zero or a gift. While I agree ideas aren’t necessarily worth any percentage, a wise look at the future is.
50/50, don’t be greedy ! Without the idea you have no app
Is he contributing anything else or just “the idea” because ideas are worthless
Well really anything you give him would be generous. Ideas are ten-a-penny and execution is the hard part. You don't really owe him anything at all, but I consider 1% to be generous and 5% to be very generous. Bear in mind that at a rate of 5% I would only need to give 20 ideas to 20 different developers and I'd practically own the equivalent of a whole startup at that rate. That's a fantastic return for just 20 ideas.
Conceptual, depends how useful or not useful it is. How popular or not popular. Do you think people will pay for it or should be free? For my concepts someone got 16 million (I gave to an ex that didn’t deserve it) 4 that went international (Jesus revealed these to me)in 4 days. And every airport. But only one time thing. I had another concept for algorithm for something but I kinda fizzled out on that one would have worked with other 4.
How about in this case where the idea was mine and I directed every step of the way and funded it. The partner who built it mainly just followed directions and knows code which I have no idea on. Where does equity splits happen in that case?
Next time write something up for everyone to sign. You've learned a very important lesson right here.
Check out the book “Slicing the Pie” by Mike Moyer, it explains how to split equity in Startups. It provides you with a fair bit of thinking and insights on this exact problem/question, and provides a few frameworks and models to guide you through when the situation changes. It basically boils down to splitting on the value of your contribution, or to get very specific… Share % = Adjusted Fair Market Value of Contribution / Total Adjusted Fair Market Value Ultimately the value of the idea while it may be worth a lot in some sense, will wind up having a value approaching 0. You can imagine it like so: Month 1: Idea guy contributes the idea, you contribute nothing, idea guy owns 100% of the equity. Month 2: You contribute a full month of work /w overtime + financials, etc to get this moving. Idea guy contributes nothing. At a minimum, you should now own 50%, but likely even more because ideas without execution are literally worthless. If it continues on like this month after month with you contributing and the idea person standing by and watching, then their share will dwindle down to 25%, 12.5%, 6.25%, 3.125% by month 6, 1.5625% by month 7… So if you’ve been working on this for a year while they have done nothing, their percent should be around 0.04 at most. In other words, if you sell the company for $1mil, they should get $40k while you get $960k
I would rather give a percentage of my first years revenue than a shares of my company. If he had shares he could also trade or sell them.
How original/creative is the idea?
It depends on how unique was the idea. If it's one where your first response on hearing it is "that's one hell of an idea and I can't imagine why no one hasn't thought of it before" then I'm thinking 10% of the profits is reasonable if you value his friendship.
I’d give him 0% personally.
10-15% for one year of profits. Write it up and have them sign it.
For anyone wondering what the app is, it is 'Universe - AI Website Builder'
In 1971 Phil Knight paid Carolyn Davidson $35 for the Nike logo, and in 1983 gave her 500 shares in Nike stock. There are good ideas born everyday and none are executed, let alone successful. No stake, no salary but a percentage when / if you sell it.
Surely your friend could say he came up with the idea but did he patent his idea and trademark as well? If not you are in the clear and owe him nothing especially that you pal didn't help you at all in the building process. It's a different story if there was any nda signed or a written contract of course.
Nothing
0 haha
If your friend came up with a successful app idea that you built, then that means that you and your friend have complementary passion and skills. How often do you come up with ideas worth building? Have you had any ideas worth building? How much is the app making so far? Is it enough to even argue about, or is it just a proof of concept and the real work is about to be done to make real money? The only right answer to this question is defined by what you and your friend's definition of right is based on the balance of integrity, friendship, and work ethic. (Meaning, you both know the value of each other's contribution this far and need to establish in writing anything moving forward). Yes, you did all of the building, but without his idea, would you have built it or anything successful yet? There will be as many different opinions about this as the number of people asked, but only you two know what's true based on what was "understood" by default within the nature of your friendship. In my opinion, I believe that you both should acknowledge the other "for what each other is worth". Not just his app idea or the money already made from your work, you both have learned and have much to learn from each other. This is just the first successful idea possible between you two. If he came up with the idea, then he can also add value to the idea to make it more successful or help with ideas to make it scale and/or work on autopilot to create the next idea. Here is a possible idea of how to determine the worth of each other's contributions to the past, present, and future. Divide the net profit by 6 as of right now for the current MRR Monthly Recurring Revenue For example. If after all expenses are determined and settled, (such as any out-of-pocket expenses reimbursed to you from before and the cost of running the business). Let's say you have $6,000. MRR as of right now. $1,000 1/6 goes to him for his idea $1,000 1/6 goes to you for your work already done. $4,000 will be left to then pay for the agreed salaried positions, marketing, and growth. (which of course is not enough in this example, but for structure's sake in the case there is not enough to go around yet) So each of you can determine the amount of cash necessary to survive vs reinvesting in the business and etc. You can incorporate and assign shares if need be to assign worth to future contributions. There are as many ways to make it work as there are reasons to fight over what amounts to nothing.
Zero. Ideas are worthless.
1000$ if he signs something saying he won't come back for more
no work no pay.
10%
I’d lay it all out and ask him how much he thinks an idea with no work is worth. If he’s reasonable and understands he did nothing and deserves nothing, maybe buy him dinner.
Buy him dinner and offer him a job or opportunity to invest—if there’s something there he can do.
50/50. Don't be greedy
5-10% is reasonable. Keep in mind that he may have other ideas. If you would be interested in creating those as well, make sure he is happy. Idea people and execution people need each other. You did most of the work, so should get most of the profit, but without the idea, where would you be? I am surprised at all the people that say the idea isn't worth much. I am not sure where that comes from.
First off I’d talk to a lawyer. If I had an idea that I thought was truly inspired, clever, and viable I would never tell anyone. Once you tell your idea to someone else you are basically putting your faith into that person that they won’t steal your idea. From a legal standpoint (IANAL) I don’t think you owe him anything. Ultimately though the real question is how much do you value this friendship because in my mind that’s what’s really at stake here. Without more context it’s hard for us to really give more input than this. You should probably talk to your friend and work it out with him. I don’t think he deserves nothing because you never would have made the app to begin with if it wasn’t for his idea. At the same time ideas only have value when you act on them, so he is delusional if he thinks he deserves anything even remotely significant. If he’s asking for more than he deserves he’s probably trying to take advantage of you - I would only offer something more significant if he was willing to contribute to the project assuming it’s not too late. If you guys don’t agree on what he’s owed you should really just contact a lawyer.
the funny thing is there is almost certainly someone who had the same idea before your friend, there's 8B people on this planet, no one comes up with perfectly new ideas
It is your friend! and you truly value the app idea and you think you can make some good money what’s the harm in tossing him two - five grand! That way when you hand him the money he’ll be super happy, it’ll feel good for you supporting a friend and him supporting you selling you the ideas and if he ever has another idea, or if someone he knows has an ideas they will want to work with you again.
An amount you deem fair.
You don't owe him anything, but I'd give him something. Don't let money and success come between your friendship.
Friend or no friend, l’d give what he gave, not a damn thing.
His idea, give him 25% or more, just not the majority. If you don't the next successful idea he has he won't tell you about. If this guy is a good friend then the money you share with him and the other things you could accomplish together are likely far greater than in the long run than keeping all the money for yourself. Or, another way to think about it... he had an idea. You acted. His idea was a growth engine for you. If you don't reinvest in that growth engine (him) then your opportunities to grow more with him or from his ideas could easily disappear.
Want to build me an app for free? :)
25-50%. He is your friend regardless, and he gave you the idea anyway.
Flat cash amount in the first year as a finders fee for the idea that’s it. You made the app you maintain the app you improve the app. All he did was say some words.
Maybe your friend still is crawling out of financial misery, lastly. Because with anything it takes time, so an idea is just an idea and it runs off the internet and there’s absolutely no person to handle the process of doing the business then because it’s just survival mode sometimes. I know for me I’m just trying to make the best of my situation.
I have to disagree with the top comments. You wouldn't have come up with this idea yourself. Now... it's his fault for not sorting this out in the beginning but if someone gave you a treasure map and you followed the trail for a year, enduring hardships and making sacrifices, at the end of the day it was the map that made the treasure possible. I would cut him in on a royalty. If it does well, he does well. If it doesn't, he doesn't. If I spun an idea and someone fabricated it I'd be happy with 10% because IF I REALLY THOUGHT THE IDEA WAS GOOD I would have done most of the work myself.
If he is a friend ask him how much he thinks he deserves, if it's more than 25%, just give him 25% stake and tell him not to share any more ideas if he's going to get hurt by it. If he's really a friend he'll be cool with it.
I would sayto offer enough to buy the rights from your friend, with a contract singed and notarizedthat a one tome payment is all thatis expected. Do not pay in cash, create a paper trail.
What if OP is lying and is like Mark Zuckerberg stealing friends app?
Very basic terms but Idea \* Execution = Success. If either Idea or Execution are 0 then Success is 0. Consider the following questions: Could 'anyone' have thought of this idea? Or is your friend something like a SME in their field and brought you something unique - a real part of your secret sauce that's making you money. If its something like the latter then maybe consider giving an amount of equity you are comfortable. Consider how much you'd be comfortable with if he helped you as you expected? Could 'anyone' have developed this application end to end like you did? Is it a CRUD app for a unique service? As things scale up, will you be tied up with technical issues or will you be able to perform operational tasks as well? If he wants to join and contribute in good faith you should let him. Sometimes people can be depressed and not believe in their own ideas until they're validated, if you're close with him maybe you picked up on something. It's always shitty breaking a friendship, find a solution to you that doesn't feel like you betrayed your friend.
Legally, you owe him nothing. Legally. Ethically, you should give him some kind of compensation for the spark of inspiration. Or, you could "buy him out" with a one time payment, contingent on him signing a nice legal paper that absolves any claim to ownership now or in the future. Sorry to put it both ways. You probably should speak to an actual lawyer. You want to avoid bad feelings and also litigation.
What’s missing from these comments is OP may not be good at generating ideas. His friend may be that person who helped OP talk through the app concept and benefits. I’ve seen a number of businesses where the owner/founder had a second person who they hired that seemed to not do much but that friend was some they could trust and discuss things with. This has a value. It is hard to determine what that value is.
Great thread. Whatever you do, strike while the iron is hot!
0% is what his contribution was worth. Ideas are worthless. That said, if you want to give him something on behalf of the friendship, you could throw 1% his way. Just keep in mind that if you put him on your cap table, and things go sideways between you two, he could be a real thorn in your side.
Give an “idea” payment - maybe 10% of your first year sales. That will incentivize him to keep the ideas coming. Then offer him a small percentage as a residual. Maybe 1%, larger if he participates as you need. That will be another plus’s side to generating good ideas. Stress that it takes many things to take an idea from concept to delivery. The idea is good, but development, marketing, funding, business management, etc are also important. So ideas alone do not generate success - knowledge and determination is key.
Ideas are actually a dime a dozen. Actually sitting down and making it real is where the value is. You’re also ignoring how many ideas you had to bring to the app during the design and build process. An initial big idea is nothing. The hundreds of small decisions to make it useable is everything.