Here’s a step-by-step framework for structuring your proposal, designed to protect your technical contribution while aligning incentives with your capital partners.

1. Define Your Contribution (Before You Negotiate)

Quantify your "sweat equity" value:

• IP Valuation: Is there existing code, patents, proprietary methods, or data sets you’re bringing? Get a third-party valuation if possible ($1K-$15K investment that pays for itself).
• Time Investment: Calculate 24-36 months of market-rate salary for your role (CTO/Technical Lead).
• Opportunity Cost: What are you giving up (current salary, other projects)?
• Risk Factor: Technical founders often take 100% of the execution risk in early stages.

Rule of thumb: Technical founders typically aim for 30-50% equity in pre-revenue ventures when business partners provide capital but don’t operate the business daily.

2. Choose Your Partnership Structure

Option A: The Technical Co-Founder Model (Recommended)

• You: 30-40% equity, operational control of technical roadmap, Board seat
• Capital Partners: 60-70% combined, control of business/financial decisions, Board majority
• Vesting: 4-year vesting with 1-year cliff for ALL parties (including the money partners—this proves commitment)

Option B: The Technical Consultant-to-Partner Path

• Start as paid technical advisor (6-12 months) with equity options
• Convert to equity partner after proving product-market fit
• Pros: You get paid while de-risking; Cons: Higher dilution later

Option C: The Capital/Technical Hybrid

• You contribute nominal capital ($10K-$10K) to buy symbolic equity (2-5%)
• This psychologically shifts you from "employee with equity" to "investor-founder"

3. Core Proposal Components

Executive Summary

"We are proposing a technical-commercial partnership to capture [Specific Market Opportunity]. The structure recognizes that successful market entry requires both capital deployment and technical execution excellence, with equity split reflecting ongoing contribution rather than just initial input."

The Value Exchange (Be Explicit)

Critical Terms to Negotiate Now

1. Technical Authority Clause

• You retain final say on technical architecture, vendor selection, and development timelines
• Business partners control budget, hiring (non-technical), and market strategy
• Dispute resolution: Deadlock breaker mechanism (e.g., external technical advisor for tech disputes, external industry expert for market disputes)

2. IP Ownership Structure

• Founders IP Assignment: You license or assign existing IP to the company, but retain moral rights or "clawback" rights if company dissolves within 2 years
• Future IP: All technical developments belong to the company, but you retain rights to underlying methods for academic/non-competing uses
• Roadmap Milestones: Tie equity releases to technical deliverables (MVP, Beta, V1.0) rather than time alone

3. The "Technical Risk" Provision Since you bear the burden if the tech doesn’t work:

• If technical milestones missed due to unforeseeable complexity (not negligence), your vesting continues
• Capital partners commit to 12-18 months of runway minimum before technical pivot requirements

4. Governance & Control

Board Structure (if forming a corporation):

• 3 seats: You (1), Capital Partner A (1), Independent Industry Expert (1) — mutually agreed upon
• Veto Rights: You get veto over: technology stack changes, technical hiring/firing, selling/licensing core IP
• Information Rights: Monthly technical demos, not just financial reports

Decision Matrices: Create a RACI chart (Responsible, Accountable, Consulted, Informed) for:

• Product feature prioritization
• Technical debt vs. new features
• Budget allocation between engineering and marketing

5. Financial Structure Models

Model 1: The Slicing Pie (Dynamic Equity)

• Track all contributions (your time at market rate, their cash at 2x risk multiplier)
• Recalculate equity quarterly based on actual contributions
• Best for: Uncertain timelines where your role might expand

Model 2: Fixed Equity with Performance Clauses

• Base equity: 35% to you
• Earn-up provisions: If you achieve technical milestones 3 months early, +5% equity; if revenue targets hit due to technical features, +2.5%
• Dilution protection: Anti-dilution provisions for your shares through Series A

Model 3: Dual-Class Shares

• You hold Class B shares (10:1 voting rights) for technical decisions only
• They hold Class A shares (economic rights only)
• Note: Check local corporate law; some jurisdictions restrict this

6. Risk Protection for You

Protect against these scenarios:

The "Hired Help" Trap:

• If they can fire you without cause, you lose all unvested equity
• Fix: Accelerated vesting on termination without cause (100% immediate vesting) or 12-month consulting payout

The "Feature Creep" Drain:

• Define "scope complete" in writing. New features outside original scope = additional equity or paid consulting fees

The "Capital Hold" Scenario:

• If they delay capital injections, you can pause technical work without penalty, and vesting clocks stop (not your fault)

The "Quick Exit" Problem:

• Tag-along rights: If they sell to a competitor, you can sell your shares too
• Technical lock-up: 12-24 month requirement that acquirer retains you as technical lead (protects your job and the company’s value)

7. The Proposal Document Structure

Create a 6-8 page deck or memorandum:

1. Market Opportunity (1 page) — Show you understand the business case
2. Technical Moat (1 page) — Why your expertise creates defensible advantage
3. Capital Requirements (1 page) — Specific use of funds (salaries, infrastructure, testing)
4. Partnership Architecture (2 pages) — Equity, vesting, governance (the meat)
5. 18-Month Roadmap (1 page) — Technical milestones tied to business metrics
6. Risk Mitigation (1 page) — What happens if tech fails, market shifts, or personalities clash
7. Next Steps (0.5 page) — Term sheet, legal formation, IP assignment

8. Immediate Action Steps

This Week:

1. NDA First: Before sharing technical details, get NDAs signed (mutual, covering their business plans too)
2. Competitive Analysis: Document 3 comparable companies showing technical founder equity percentages (ammunition for negotiation)
3. Salary Research: Print market-rate compensation for your role in your geography

Next Week: 4. Draft Term Sheet: Use the "Model 2" framework above as your opening position (aim high: 40-45% equity, expect to settle at 30-35%) 5. Founder Agreement Template: Download a founder agreement template from Clerky, Stripe Atlas, or local startup legal clinic 6. Escrow Concept: Propose that 20% of their capital sits in escrow, released only when you hit technical milestone #1 (aligns incentives)

Before Signing: 7. Independent Legal Review: Even if they pay for the corporate formation, you pay a separate attorney $1K-$1K to review your personal liability and IP rights 8. Tax Planning: Consult accountant about 83(b) elections (crucial if vesting shares—must file within 30 days of grant)

Would you like me to drill down on any of these specific areas?

• Valuing your existing IP if you’ve already built components of the solution
• Specific negotiation scripts for the equity conversation when they expect more control because they have cash
• Technical milestone structuring that protects you from "endless pivot" scenarios
• Alternative structures like licensing your tech to their operating company rather than joining as equity partner (often better for technical experts)

Also, to tailor this further:

1. What industry/sector is this in (software, biotech, manufacturing, etc.)?
2. Do you have existing IP, or would you be building from scratch?
3. Is this a lifestyle business or high-growth/VC-backable venture?
4. Are these two people passive investors or active operators?

Crafting Your Business Partnership Proposal

You're in a strong position with your technical expertise—the "secret sauce" that makes the business viable. The goal of your proposal is to clearly articulate the opportunity, define roles, propose a fair equity split based on contributions, and outline protections. Keep it professional, concise (5-10 pages), and data-driven. Use a clean template in Google Docs, Word, or Canva.

Step 1: Research and Prepare (1-2 Days)

• Define the business basics: Outline the product/service, target market, revenue model, and projected financials (e.g., 3-year revenue forecast). Use free tools like Google Sheets for simple projections.
• Value your contributions:
  • Technical know-how: Estimate your "sweat equity" (e.g., 6-12 months of full-time work at $100K-$100K market salary, depending on field).
  • Their capital: Ask for specifics on investment amount (e.g., $X seed funding).
  • Their business know-how: Acknowledge but quantify (e.g., networks, sales expertise).
• Benchmark equity splits: In tech startups, technical founders often get 30-50% if providing IP/core tech, with investors splitting the rest. Propose 40% for you (tech/IP), 30% each for them (capital + ops), adjustable based on capital injected.
• Consult resources:
  • Read free templates from SCORE.org or Startup.com.
  • Use tools like Carta or Clerky for cap table previews.
• Get a lawyer preview: Spend $100-500 on a 1-hour consult with a startup attorney (find via UpCounsel or local bar association) to review your draft. Disclaimer: This is not legal advice—customize to your jurisdiction.

Step 2: Structure Your Proposal Document

Format with headings, visuals (charts for financials/equity), and your contact info. Send as PDF via email or DocuSign for tracking.

1. Executive Summary (1 page)

• Hook: "Partnering our complementary strengths to launch [Business Name] in [Industry], targeting $X revenue in Year 3."
• Your value: "I bring proven technical expertise in [specific skills/field], including [key achievements, e.g., patents, prototypes]."
• Their value: "Your capital and business acumen will handle funding and scaling."
• Proposed structure: "[Legal entity, e.g., Delaware LLC]. Equity: 40% me, 30% each partner. $X initial capital."

2. Business Opportunity (1-2 pages)

• Problem/Solution: Describe the market gap and your tech solution.
• Market Size: Cite data (e.g., "$X billion TAM per Statista").
• Competitive Edge: Your tech IP as the moat.
• Milestones: Phase 1 (MVP in 6 months), Phase 2 (launch), etc.
• Financial Projections:

  Year	Revenue	Expenses	Profit
  1	$100K	$100K	-$100K
  2	$100K	$100K	$100K
  3	$1M	$100K	$1.2M

3. Roles and Responsibilities

• You (Technical Lead, 40% equity): Product development, IP ownership transfer, R&D, hiring tech team.
• Partner 1 (Capital + Ops Lead, 30%): Primary funding, operations, HR.
• Partner 2 (Capital + Business Lead, 30%): Sales/marketing, customer acquisition, partnerships.
• Time commitment: All full-time initially; vesting schedule (4 years, 1-year cliff).

4. Ownership and Financial Terms

• Equity Split: As above; use a simple cap table:

  Partner	Equity	Vesting	Notes
  You	40%	4-yr std	Sweat equity + IP
  Partner 1	30%	4-yr std	$X cash investment
  Partner 2	30%	4-yr std	$X cash + expertise

• Profit Distribution: 100% reinvested until breakeven; then pro-rata after salaries ($X base for each).
• Funding: Tranches (e.g., 50% upfront, 50% at MVP).
• IP: You retain pre-existing IP; new IP assigns to company.

5. Governance and Risk Management

• Decision Making: Majority vote for ops; unanimous for funding/exits.
• Non-Compete/Confidentiality: 2-year post-exit.
• Exit Strategy: Buy-sell agreement; right of first refusal.
• Dispute Resolution: Mediation then arbitration.

6. Next Steps and Call to Action

• "Schedule a call within 1 week to discuss."
• Attachments: Your resume, prototype/demo, draft operating agreement, NDA.

Step 3: Pitch and Negotiate (Ongoing)

• Delivery: Email with teaser summary; follow up in 48 hours.
• Prep for pushback: If they want more equity, counter with milestones (e.g., +10% if you hit MVP early).
• Sign NDA first: Before sharing sensitive tech details.
• Formalize: Use free templates from LegalZoom or Rocket Lawyer for initial agreement; lawyer finalizes.

This structure positions you as the indispensable tech visionary while being fair. Start drafting today—aim to send in 3-5 days.

What specifics can you share to refine this? E.g., What is the business/industry? How much capital are they committing? Any prototypes or traction you have? Your location/jurisdiction?