5 ms·

I'll be brutally honest, just walk away. You gave it a good go and have decided it isn't for you. If it is still for your co-founder, thats fine - it sounds l

by iqonik 11y ago

I'll be brutally honest, just walk away. You gave it a good go and have decided it isn't for you. If it is still for your co-founder, thats fine - it sounds like she is the one with the debt anyway? There is not point in haggling for equity if your company isn't profitable - it's worth nothing and you have decided you don't have the resources to make it profitable. If you're really worried about it becoming something in the future, then perhaps you're not done yet and should regroup or pivot the idea. You can't have your cake and eat it.

joelrunyon 11y ago
This. You either believe in the idea enough to get it traction or start your new one. Don't try to do both.
- pm 11y ago
  Yeah, you can take away everything you've learnt from it (which in itself is a valuable thing) but you're unlikely to get the business in a form that's worth the trouble. It's amazing how as humans we cling to the slightest thread of hope.
  - marcus_holmes 11y ago
    This. treat it as a cheap year's course in startup. Wish your co-founder the very best of luck, sign everything over to her, and walk away. Hope she does amazingly well and can fund your 4th or 5th startup because you're still friends.
- lsniddy 11y ago
  I would consider this the single most valuable lesson I've learned. You really can't back more than one horse. It's all or nothing pre-traction.
onion2k 11y ago
You can't have your cake and eat it. Yes you can. There might be considerable future value in the work done so far. Neither party wants to give up on that, they both want to work on it, but they can't agree on a direction. So work out between you what all the non-sharable assets (physical things, brand, etc) are worth right now, and draw up an agreement that gives all of that to one party with an agreement to pay the other party the value of it plus something extra if a business is either funded or sold at any time in the future using those things. Which person gets the assets should default to the person who took on the debt because if that debt is called in they'll need to sell those things to pay it off (the fact it was from a friend is irrelevant). All the sharable stuff (code, IP, etc) just get cloned and you get a copy each. Everyone's a winner.
- gaius 11y ago
  Yes you can. There might be considerable future value in the work done so far Ah, the Winklevoss Gambit.
- mtrimpe 11y ago
  Or more generally: You currently have a share in the company which you want to sell. Without real revenue the company's value is almost entirely subjective. The right price then is basically what you can convince your partner to pay you for it. If your partner calls your bluff and is prepared to scuttle the company that could well be $0. If (s)he believes in a bright future for the company it could just as well be $10+k though.
  - deleted 11y ago
    [deleted]
  - TeMPOraL 11y ago
    > If your partner calls your bluff If you ever find yourself using those words when considering an action plan, run in the other direction as fast as you can. There lie antagonistic business practices. Ruining a friendship over a petty startup issues is not worth it. Nor losing your dignity. You're still friends, settle this as friends, each trying to make it beneficial to the other party.
    - vinceguidry 11y ago
      No kidding. I was interested in band management awhile back and looked for some information. I was struck when I saw that it was common practice to operate without a contract or even a formal agreement. The gist was that nothing about that endeavor could possibly work outside of an environment of mutual and complete trust. If you even have to ask for one, it means your head isn't in the right place or that isn't the right band for you. The thing about a startup is that only the investors are really in a position to negotiate cleanly and with a clear head. If you're betting your time and effort, then by definition you're coming to the table with assets that are far more important to you than they will be to anyone else.

by iqonik 11y ago

joelrunyon 11y ago

This. You either believe in the idea enough to get it traction or start your new one. Don't try to do both.

pm 11y ago
Yeah, you can take away everything you've learnt from it (which in itself is a valuable thing) but you're unlikely to get the business in a form that's worth the trouble. It's amazing how as humans we cling to the slightest thread of hope.
- marcus_holmes 11y ago
  This. treat it as a cheap year's course in startup. Wish your co-founder the very best of luck, sign everything over to her, and walk away. Hope she does amazingly well and can fund your 4th or 5th startup because you're still friends.
lsniddy 11y ago
I would consider this the single most valuable lesson I've learned. You really can't back more than one horse. It's all or nothing pre-traction.

onion2k 11y ago

You can't have your cake and eat it. Yes you can. There might be considerable future value in the work done so far. Neither party wants to give up on that, they both want to work on it, but they can't agree on a direction. So work out between you what all the non-sharable assets (physical things, brand, etc) are worth right now, and draw up an agreement that gives all of that to one party with an agreement to pay the other party the value of it plus something extra if a business is either funded or sold at any time in the future using those things. Which person gets the assets should default to the person who took on the debt because if that debt is called in they'll need to sell those things to pay it off (the fact it was from a friend is irrelevant). All the sharable stuff (code, IP, etc) just get cloned and you get a copy each. Everyone's a winner.

gaius 11y ago
Yes you can. There might be considerable future value in the work done so far Ah, the Winklevoss Gambit.
mtrimpe 11y ago
Or more generally: You currently have a share in the company which you want to sell. Without real revenue the company's value is almost entirely subjective. The right price then is basically what you can convince your partner to pay you for it. If your partner calls your bluff and is prepared to scuttle the company that could well be $0. If (s)he believes in a bright future for the company it could just as well be $10+k though.
- deleted 11y ago
  [deleted]
- TeMPOraL 11y ago
  > If your partner calls your bluff If you ever find yourself using those words when considering an action plan, run in the other direction as fast as you can. There lie antagonistic business practices. Ruining a friendship over a petty startup issues is not worth it. Nor losing your dignity. You're still friends, settle this as friends, each trying to make it beneficial to the other party.
  - vinceguidry 11y ago
    No kidding. I was interested in band management awhile back and looked for some information. I was struck when I saw that it was common practice to operate without a contract or even a formal agreement. The gist was that nothing about that endeavor could possibly work outside of an environment of mutual and complete trust. If you even have to ask for one, it means your head isn't in the right place or that isn't the right band for you. The thing about a startup is that only the investors are really in a position to negotiate cleanly and with a clear head. If you're betting your time and effort, then by definition you're coming to the table with assets that are far more important to you than they will be to anyone else.