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Well, I watched the Y-combinator vid about working for startups and he was saying if a company has 2 co-founders, and angel funding then 5-10% would be about ri

Well, I watched the Y-combinator vid about working for startups and he was saying if a company has 2 co-founders, and angel funding then 5-10% would be about right. I presume that would be a paid position in the US though. In the UK coders never seem to be offered equity, which I think is wrong. From what you say, they're working for a client. But the client isn't paying either for the project? Sounds unwise! But does sound like a way of potentially creating something organically from nothing with just your effort. It does sound highly risky though. What if this end client is rubbish at sales? Do you get the right to retrieve his 25% and give it to another Sales professional? Or retrieve, then sell the 25% to an investor, in order to pay someone to sell it? If it wasn't friends would you work for nothing? If not, then at some point when it gets hard going, will you resent your friends for you not being paid? I guess it comes down to, is the effort you're willing to put in going to be worth your share of the dividend on the profit at the end of year 2? (Presuming it takes more than a year to pay off!) Just my thoughts. Not really from direct experience, though I do work for a consultancy that does work for startups.

magic_johnson 16y ago
I caught that vid too, but not sure how important the angel funding part is in this case. They're a small profitable shop working for a client and cutting him a break since he's a friend as well (we're all friends here! hah). So the client pays a smaller amount for the app that he plans to use for his own business but receives only 25% of any future profits that the app generates. The client's expertise is not sales, he runs a business in the domain and knows other small businesses with similar needs. If it wasn't friends, then I would base my judgment solely upon my evaluation of the product's potential to be a success (given the people working on the project, and the idea itself). I know my friends, I know they're competent, and I know on a scale of 1 - 10 in terms of having an "in" I'd put the client at an 8. Those factors sort've take some of the risk away for me, but not quite enough to put me at ease and 10% does feel like a small amount to be working for. I wouldn't resent my friends if the project fails, they're my friends. Plus resentment is one of the seven deadly sins of business.

magic_johnson 16y ago

I caught that vid too, but not sure how important the angel funding part is in this case. They're a small profitable shop working for a client and cutting him a break since he's a friend as well (we're all friends here! hah). So the client pays a smaller amount for the app that he plans to use for his own business but receives only 25% of any future profits that the app generates. The client's expertise is not sales, he runs a business in the domain and knows other small businesses with similar needs. If it wasn't friends, then I would base my judgment solely upon my evaluation of the product's potential to be a success (given the people working on the project, and the idea itself). I know my friends, I know they're competent, and I know on a scale of 1 - 10 in terms of having an "in" I'd put the client at an 8. Those factors sort've take some of the risk away for me, but not quite enough to put me at ease and 10% does feel like a small amount to be working for. I wouldn't resent my friends if the project fails, they're my friends. Plus resentment is one of the seven deadly sins of business.