First, download the Grunt Fund Cheat Sheet. It shows how to calculate the theoretical value of just about anything.
Most new companies aren't worth anything when they are new. We hope that they will be worth something in the future, but in the beginning they don't have any real value. Don't feel badly, you are probably working hard to create value which is a good thing.
To build a company you dedicate time, ideas, relationships, money, supplies and other things that we hope will create value. However, when these things are put into the company the company still has no value (beyond the resale value of it's assets). So, actual value for a start-up company is pretty much meaningless.
The key to understanding the right equity split is understanding relative value. If you are starting a tech company a former senior Oracle developer is worth more than a junior developer right out of college. Relatively speaking.
To use a Grunt Fund you need to assign value to contributions that will help you understand how much it is worth relative to other contributions. This is called "Theoretical Value" because it is not based in reality.
In a Grunt Fund it is not uncommon for a contributions theoretical value to be higher than the contributions actual value. This will help us account for the risk that the contribution will never be worth anything.
Let's say you know you can consistently charge $50/hour for your services. In a Grunt Fund you would use a theoretical value of $100 (more on this calculation later) to account for the fact that the money is at risk.
$100 cash has a higher relative value than your hour. After all, it's much harder to come by $100 in cash than it is to spend an hour working on something. So, cash is much more valuable, relatively speaking, than time.
There is a simple process for assigning a theoretical value to each type of contribution a person can make. For a list of these calculations simply download the Grunt Fund Cheat Sheet.