Hot answers tagged partner
415
This is such a common question here and elsewhere that I will attempt to write the world's most canonical answer to this question. Hopefully in the future when someone on answers.onstartups asks how to split up the ownership of their new company, you can simply point to this answer.
The most important principle: Fairness, and the perception of fairness, is ...
41
I'm sure some folks get by with unequal splits. But I don't think it works for most partnerships. Someone will inevitably be upset because someone is getting more. Find a true spouse or two for your startup. If you can't find people that want to bleed for it like you, than go to bat without partners. Don't bring on people who just care a little now, and ...
20
As I'm probably the type of guy you're looking for, let me tell you who I'd be interested in partnering with.
1) Someone with a proven track record (i.e. has actually created something, start to finish)
2) Someone with some serious online marketing skills, copywriting, etc...
3) A talented designer/creative
4) Other developers
5) Someone with money ;)
...
20
View your startup as going to war. You will be fighting in the trenches together with the people you bring along.
See the equity split as how you divide the bullets between yourselves.
If there is any chance that one of the founders will take his bullets and shoot you in the back he shouldn't be given any bullets in the first place.
If you believe that ...
17
I've been through (and still am in) this situation. The first time I went through it, I just decided to swallow my pride and let it go. I think it was the right decision, as there's no way I could have done the project without my partner, even though I put in the lion's share of the work.
I don't think it's possible to set it up so that there's a perfect ...
14
How about this.
I agree that you have put in a lot of effort and got it the required traction while others just drifted.
Now give it another couple more months. Let others put in their effort too(for marketing, sales, advert) and help take it to the next level.
But before you do that, be upfront in telling everyone that its their time now to add their ...
11
What does your partnership agreement say? Okay, that was meant to be rhetorical, since I'm asuming you don't have one. But this is just to reiterate the importance of said agreements.
If you can't come to an agreement over splitting up, then it will get ugly. Sounds like it already has. But, if there's no company and no assets, then what's there to split? ...
11
Do not "let it ride". It will cause you more and more stress over time, affect your relationship with your partner/friend, and your pocket book.
I was in a partnership for 17 years. Initially, the inequities were explicit and acceptable (duties were different). We re-structured the way the business operated after 10 years, and our duties were then ...
11
The truth is that most ideas are worthless and not unique. It is the execution that adds value.
Having said that, it may be that you can find the time to test out your idea in a small but meaningful way. If it looks like it is following your expectations, you can pursue it. You can hire people to help you, just as any other business does.
Think about your ...
10
If you are a 50/50 partnership then you have the usual options to manage conflicts that cannot be resolved:
Buyout your partner;
Terminate the partnership;
Dispute resolution (anything the two of you agree to should be fine, provided it does not run afoul of your jurisdiction's laws for your entity type but I would like to recommend mediate and alternative ...
10
20% sounds like way too much, considering what you are getting in exchange is unclear. I'd give 20% to someone who is my co-founder and will take a very active role in running the company.
If you want, give 20% with vesting over 4 years. So most likely, you'll get rid of this non-performing academic and all they'll have is 5% (still too much in my opinion).
...
9
Its all a numbers game. Be personalable, that is key. I talk to people everywhere, at the gym, grocery store, or out walking the dog.
Be friendly, never argumentative,
and always be selling yourself as a
likeable person.
Be social, hanging out at the same place every Friday will get you near the same crowds.
Join organizations such as your local
...
8
This type of question been asked often and nobody ever mentions what the other partners expect. If they have given you no indication of what they want, you need start with that discussion. They may just offer a small slice of their time on a specific aspect of this business and only want 5% or they both may want half (I'd like to be a fly on the wall for ...
8
Yes, they could reduce your percentage ownership of the company in the future, but this is normal and would generally happen to the other shareholders at the same time. For example, let's say you own 12%, but then the company raises money by selling 50% of itself to a VC. They'd do this by issuing new shares, doubling the number of shares in circulation, ...
7
I could be all wet here, but I don't think you should. Partners should not be just for getting investors, they are mostly to get you to where you want to be - and you are mostly there already. I think you should look at it as an advantage - that you have the flexibility to bring people in when they are needed.
6
TODAY was my business partner's last day at the company where we both have our day jobs. We are also in the "one foot in each boat" situation, and decided that one of us (him) simply needed to jump in and the other (me) agrees to take no cash from the business (or pitch in more cash when needed) until his needs are met.
I'll keep you posted, but I'm ...
6
I'd suggest going face to face - check meetup.com for Startup and Entrepreneur groups - there's over 3,000 such meetup groups in the U.S. alone.
Finding the right partner given your criteria means finding someone (not a developer) who wants to find a startup to join.... like you. Picking a business partner is far too critical a decision not to make working ...
6
Any decision you make on these choices is acceptable and normal. Here's some considerations:
If you want your partner to put up money, then just establish that up-front. Otherwise I feel it's too complicated to track all that and it could get messy.
For example, what if you want to spend $2k/mo but he doesn't want to kick in money for it. Do you "win?" ...
6
Joel's comments are pretty good, but might be potentially a bit large considering the relative scope of many people's ambitions when starting a company.
I normally recommend considering: x% split equally for owners. y% left over for investors. z% for other employees/board members.
Splitting the z% based on seniority or risk equally isn't always the ...
6
These kind of deals are actually common when doing business internationality. Some of the Pros and Cons include:
Pros
Investment from another company does not dilute your company
The deal is separate and therefore failure is more manageable
The investing company does not control your company
More focus on building the business as opposed to funding an ...
6
If you are pitching a VC, then team is important. More important than that is what you built and can it make money.
A VC will want you to build out your team quickly and might even provide team members for you.
One thing you should look at is why your partners left. They will certainly ask that question.
The real advantage of more team members, at this ...
6
The value of your services to your current respective employers is not related to the value of the service that you will provide to your new ventures customer. I do not believe that it is a good place to start.
There are several models for determining pricing. One of those is the prevailing or market hourly rate times the estimated number of hours it will ...
5
I agree with Jason: Half-time attempts are unlikely to be successful because there's simply too much to do.
Every startup will take time to get ramped up to a profitable state. Take the plunge when you have enough personal savings to work on the startup for a while without worrying about paying your basic living expenses. Otherwise you risk having to quit ...
5
There are really three ways
Hire somebody but that requires money which is out of the question at your stage
Advertise for somebody to partner but how do you know the person has the skills and dedication and is willing to invest his time for a potential payout?
Involve people you know from work, networking etc, get them excited about the idea and ask if ...
5
+1 to Ian.
The fact that you say "I have a ton of detailed ideas for Web 2.0 companies" is a red flag. Forget all but 3-4 of these ideas. Do a detailed analysis and figure out one that has the best chance.
Next, forget about finding a "committed programmer" and think of it as finding an investor. The developer is going to do most of the work initially. You ...
5
Generally the royalty percentage will increase as your demand for minimum payments or up-front payments decrease.
That is, the more you're willing to risk -- risking that this won't work and you won't get significant royalties -- the more reward you require if the company is indeed successful.
In the limiting case, if you were being paid market-rate for ...
5
You should be evaluating each partner on their own merits. It's great if your partner can find you another who is worthy, but you should determine on your own whether or not you want the third wheel.
This should also be a warning to you about working with this partner. You have not yet committed to him, and he's making possibly unreasonable demands of the ...
5
If you're bringing very different skills to the business, then you can handle conflict by agreeing that while discussions are held, ultimately the partner with the appropriate expertise gets the final say.
Another option is to take turns who gets the final say after discussion. Set a limit on time to discuss (obviously depends on the nature of the issue) ...
Only top voted, non community-wiki answers of a minimum length are eligible
