What should I take into consideration before start working on a Startup as a co-founder?
Guys, I would love to get some help on this.
I have been talking with different people in order to start working on a startup with a co-founder. I would like to know if you have some good resources to learn what should I ask before actually start working on it. Let's say before start coding.
Is there any checklist that you have used on the past?
Ooh, I've done this twice. It's hard. Really hard. Since it's a startup (assuming bootstrapped and you're working 80-100hrs a week), you'll spend more time with this person than your significant other or theirs.
A lot of this depends on some details, can you provide some, such as:
I'm assuming you haven't worked with them yet or for long. Can one of you contract out the other for a month or two? You could pay them in exchange for work and a little less equity on the back end or work off a sort of "tab" if you both work well together.
You should definitely have a cliff for equity vesting, if the company is worth 0 today, vesting X% immediately is handcuffing you to that person for life. If either of you leave with any percent and the other builds some massive company, it's probably not fair. My suggestion: 1year cliff, X year vest.
I would say skillset is not as important as getting along. You could both be developers, one will inevitably move more into marketing but the interpersonal relationship is huge.
^This. Great tips. As @briant1 says, the MOST important thing is how good you get along with each other. Think of this more as a marriage than a coleague relationship.
Important things to have 100% clear before you sign anything:
And last and most important in my opinion. Work ethic, are you both ethically aligned? This is very commonly overlooked since people at the start are eagger to start building, selling etc... and usually its never a problem. Until its too late.
...
The list is endless, but bassically try to put both of you into different hard scenarios and be completely sincere about how you would act/think. An afternoon talking sincerely over many topics is all you need. You might discover you are not compatible, but hey you just saved years in time :D
Best of luck with your projects!!
"Important things to have 100% clear before you sign anything:"
Do you mean we should put this answers on a paper and sign it? Or you talking about signing a different kind of contract? Would should we sign?
"Do you mean we should put this answers on a paper and sign it?"
Wasn't really referring to that, but is definetly a good idea with some of them (specially equity/vesting is a must).
What I really meant is that you should have this 100% clear before you both "marry" legally in any way. Because if some of this happens to be a problem and you are already legally binded things get way more complicated.
If you decide to go ahead and eventually create the company. I would recommend you to get a specialized lawyer and get him to help you create a contract/pact with most of this things stablished.
Obviously you are not going to put on it if you are doing things for passion or fame, but hope you get the idea :P
These are key: thanks!
1.Equity share
2.Vestings/Cliff.
3.Salary split.
4.Motivation
5.Work ethic
2nd everything @albertovilva says... we should write a book ;)
He hit on a bunch of great questions and still used "etc" and "..." The point is that there is not a set checklist, you'll have to figure it out as you go but communication is key. Try to get as much in writing as you can.
I'm interested to see how this goes, hopefully @RemoteforIdeas will update us
We should write a book. Or a list a guide, right? I'm taking my own notes and building my checklist. I'm a designer, so happy to build that book with you guys! ;)
The idea has been crossing my mind lately!
Also very interested, will follow this thread for updates. :D
Thanks Brian for your time. All great questions.
I'm taking notes and digesting the information.
About this question: "How much work is already done on the business, by whom?"
How will this impact on the agreement? Does it mean one of the partners will get more equity? Or that if the company get's money he will get a higher salary?
"Is there currently a split? Are you 50/50 (this would be hard in my opinion)" Isn't it the most fear amout? 50% and 50% for each other? Specially thinking about the future of the relationship?
I'd suggest reading (or listening to) "The Founders Dilemma". I know when I listened to it, it got me thinking about a lot of different things.
https://www.amazon.co.uk/Founders-Dilemmas-Anticipating-Foundation-Entrepreneurship/dp/0691158304/ref=sr_1_1?ie=UTF8&qid=1533213250&sr=8-1&keywords=the+founder's+dilemma
It talks a lot about equity share, job roles, accountability, etc. It's a pretty great reference (though not a bible).
cofounder or cofunder?
Co-Founder
I think co-founder should have some skill set you don't have. If one is good at development, the other should be good at stuff like sales and marketing.
Yes, but I'm more interested in learning about how to deal if things go wrong. If someone quit or if we should sign something and when...