How much equity should you give a development partner?

Founders ask us this in almost every first call, usually in a slightly worried tone. The answer is more boring and more knowable than most people expect.

The short answer

The percentage is a function of how much cash is on the other side of the trade.

Anything above 20% for a development partner is not a partnership deal, it is a co-founder arrangement with someone who did not take founder risk. It can still be the right call, but it should be a conscious decision rather than a discount you accepted under time pressure.

What the number actually depends on

How much cash you are saving. This is the core of it. If the market price for your build is $45,000 and you are paying $15,000, you are buying $30,000 of runway with equity. At pre-seed, roughly $2,000 to $3,000 of discounted cash per 1% is a defensible trade. That puts $30,000 somewhere between 10% and 15%.

Whether they stay after launch. A partner who ships and leaves is worth less than one who is still fixing, iterating, and advising in month nine. If equity is being taken, ongoing involvement should be written into the agreement, not assumed.

What stage you are at. Pre-seed with no product, the same percentage costs you little in absolute terms. Post-revenue, that same percentage is expensive and cash is usually the better currency.

Whether they bring more than engineering. Introductions, technical due diligence support for your round, hiring help. These are real and worth something. They are also easy to promise and hard to enforce, so ask for specifics.

What it looks like two rounds later

This is the part founders rarely model, and it is the part that matters.

Assume you give a development partner 10%, then raise a pre-seed selling 15%, then a seed selling 20%.

Two things stand out.

Your partner dilutes exactly as you do. Their 10% is 6.1% after two rounds, not 10%. Founders often argue about the original number as if it were permanent. It is not.

You still hold 55% after a seed round, which is a healthy position. The 10% was not what put pressure on your cap table; the option pool and two rounds of investors did.

Run the same table with 25% to the partner and you finish under 42% after seed, which is where investors start asking uncomfortable questions about founder motivation. That is the real ceiling, and it is why the number matters.

Vesting matters more than the percentage

A 12% stake that vests on delivery is a better deal for you than an 8% stake granted on signature. The percentage is what you pay. Vesting is what you get for it.

A reasonable structure ties tranches to things that can be verified:

If the project stalls at week three, the partner holds 40% of the agreed stake rather than all of it. That is the protection you are buying, and it costs nothing to ask for.

A partner who insists on the full grant at signature is telling you something about how they expect the relationship to go. Believe them.

Terms worth refusing

These come up more often than they should.

Board seats. A development partner does not need to vote on whether you pivot. Decline this and expect no argument from a serious partner.

Veto rights on funding or sale. This can block a round years later. No engineering contribution justifies it.

Preferred shares. Preference stacks belong to investors who put in money. Common shares only.

Anti-dilution protection. This means you dilute and they do not. In the table above, their 10% would stay 10% while your position absorbs it. Refuse.

Equity plus full market-rate cash. Pick one. Full price plus a stake is not a partnership, it is a fee with an option attached.

No buyback clause. Ask for the right to repurchase at a defined multiple within a set window. Many partners will accept it. If you do not ask at signature, you never get the option.

What investors actually think

The concern is not the percentage, it is the control and the signal.

A service provider at 8% with common shares and no rights is unremarkable. Diligence notes it and moves on. The same provider at 25% with a board seat becomes a discussion about whether the founders control their own company, and that discussion happens at the worst possible moment.

The second question investors ask is whether the partner is still involved. A studio that shipped and disappeared holding 15% looks like dead weight on the cap table. A studio still building looks like a team member. Same percentage, very different reading.

What we do

We take 3% to 15%, scaled against how much cash is being paid. The lower tier of our pricing has the higher equity, and the reverse.

Vesting runs in the three tranches shown above. Common shares only. No board seat, no veto rights, no anti-dilution. We accept buyback clauses.

We also decline equity entirely and work on a cash basis when the situation calls for it, which is roughly half our engagements. Equity only makes sense where the upside is real and the legal structure can carry it. In markets where transferring shares is slow or ambiguous, we say so and quote cash instead.

If a partner cannot explain their equity ask in terms of the cash you are saving, that is the answer to your question.

Working out the trade for your own project? Send us the details and we will give you the arithmetic, whether or not you work with us. Our pricing and equity ranges are published openly.