Should You Give a Marketing Co-Founder Equity?

Short answer: it can work once, but it doesn't repeat. Giving up equity is a marriage. If that person drops off, you're stuck, and once you've used up their network you can't hand out equity to three more people without diluting yourself away.

Here's the common story. You're technical. You build the product, you launch, and you find out marketing is hard. So you look for a partner and think: if I just find one co-founder who's good with marketing, I'm set.

I'm not saying it can't work. I did it. I co-founded a business with a master networker: great at marketing, great at sales, and he brought a lot of deals to the table.

The two problems

1. The risk is enormous. If you're giving up equity, you're getting married. If they lose interest, drop off, or anything happens to them, you're cooked, and you can't undo it.

2. It doesn't scale. One person, even with a big network, is one network. When it's used up, you can't go and find three more marketing partners: you don't have the equity for it. Every new partner dilutes you further.

Graded

On the same scorecard I use for every way of getting users:

• Upfront cost: ownership.
• Scalability: low.
• Fulfillment: easy, because they have real skin in the game.
• Risk: very high.
• Difficulty: hard, because you can't undo a wrong pick.

Easy fulfillment is the part that makes it tempting. Someone who owns a piece of the company shows up. The problem is everything else on the list.

What to do instead

Prove it before you marry it. Start a partner on revenue share. If they actually sell, that's the case for equity. That is the rule I use now, and it's the subject of why commission-only partners rarely sell: most won't, and the ones who do have earned the conversation.

And for distribution itself, look at partnerships that scale past one person: integrations into products that already have your customers. A co-founder solves "I need someone who owns this with me". An integration solves "I need to be in front of people who already buy something like this". They are different problems, and only one of them needs equity. (More on the second in how to get collaborators without giving up equity.)

Frequently asked questions

How much equity for a marketing co-founder?

Ask first whether you need a co-founder or a channel. A channel can be had on revenue share.

Can I test a co-founder before giving equity?

Yes: a revenue-share period first, equity after it's proven.

Why doesn't a marketing co-founder scale?

Because one person is one network. When it's used up you can't bring in three more marketing partners on equity without diluting yourself further each time.

If what you actually need is distribution rather than a partner in the company, join Ordana and start collaborating with startups that already sell to your customer, on revenue share.

Related reading:

• How to Get Paying Users for Your SaaS Without Ads — all four partnership models on one scorecard.
• How to Get Collaborators for Your SaaS Without Giving Up Equity — why revenue share beats equity for operational roles.
• How I Found a Go-To-Market Partner Without Spending a Dollar — the revenue-share version, first-hand.