4 ms·

Ask HN: $100k and equity

3 points by Choices 16y ago

So I've got this idea for a pretty massive vertical app but I'm not a developer. Talked to a couple hackers (working at legit companies so seemed pretty comfortable with salary) - no interest. Contacted a development group today who 'got it' immediately and want to do it. The thing is though, they don't want to go in as full partners but want $100K + equity for devel. They've also got the contacts for the money. I'm totally dependent on them for devel work, contacts and hooking up with advertisers. I'm working at my own company 9x6 hours so can only do the specs for my portion of the app and be running the prototypes real-time, everyday. My idea, their 80% of the work. What's a fair split if they round up the 100K? How about if I come up with the money?

aberkowitz 16y ago
The fact that the original people you talked to were not interested may be a sign that your idea need refinement. You shouldn't take the development group's interest as approval, as they get 100K regardless of your success. Before you continue, you should conduct focus groups with people who have knowledge of the subject area. Best of luck.
- Choices 16y ago
  When I was talking to the first couple of people, I hadn't really fleshed out the details clearly enough. And they really are happy in their corp jobs. Yes, they get the 100k, but I would probably keep more equity that way. I was surprised at how genuinely excited they became as they realized their own need for the web level features. And, of course, they immediately took it mobile.
charliepark 16y ago
$100K sounds like a lot for an app. With equity on top of that? I'd stay away. Can you build a prototype of it? Even in Excel or something to get the general logic worked out?
- Choices 16y ago
  OK, this is much more than just an app. It is capturing a lot of data at one level, then there is the 'web level' where the public interacts with it. Lot of opportunity for revenue at the public level immediately (targeted ads). Vendors will be pushing 'specials' down to the first level when they see the apps getting some traction.. .
  - thomas11 16y ago
    Can you try to generate some test data first, and create a mockup of the web interface? A web developer can do that and add some interactivity step by step in relatively little time. When you have a vision of a finished product, it seems like so much work to get there. But usually you can break it down and find steps you can take iteratively. Mocking up the idea will show you more about its potential and how it should be executed once developers start working on it for real.
    - Choices 16y ago
      This is pretty much what I showed them. All the captured data, described how the apps work, what makes the data so valuable, etc. Like I said, they got it , but still made the case it was a lot of work.
moonpolysoft 16y ago
Sounds like you are going to get screwed if you go with the dev group. Especially since you will be talking to investors to which they will be introducing you. Keep pounding the streets to find your technical co-founder. Go to meetups and other events. It's just like dating.
- Choices 16y ago
  Damn, I would love to find some people to go with this. Problem is, in one sense, it's a fairly obvious service but there's only room for one of them (database, ground level), so whoever executes first owns the world (really :)
  - moonpolysoft 16y ago
    I know you think your idea is the best invention since alcohol, but it probably is not. Given the choice between a half-assed execution of your awesome idea and finding the right person who can execute any idea I would choose the latter.
moonpolysoft 16y ago
Also I'd like to add that you should mention the name of the dev group. What they're doing is certainly shady, if not completely unethical.
- Choices 16y ago
  Well, they ARE a dev group and are customarily paid for their work. Also, this is pretty big and portions will be shipped overseas so there will be real costs incurred.If things get too weird, I'll post here.
- togasystems 16y ago
  That is not shady. It is business. They are throwing out a highball offer and will quite possibly negotiate to smaller deal.
mgkimsal 16y ago
Choices - I meant to write last night but got tied up. Being on that side of the table, I get their motivation. However, that sounds like a rather large amount of money. LaunchBox Digital - an incubator around here - gives teams $20k I think, plus connections and other resources. $100k is lot of money to develop a product. It's certainly not unreasonable if the specs call for it. But as someone else said, they're going to get paid regardless, PLUS they want future revenue from the idea. I think you should shop around some more, and I'd be interested in talking to you more about this. Contact me at mgkimsal@gmail.com - willing to consider a money/equity split, and probably not anywhere near a $100k deal. :)
- Choices 16y ago
  Yes, the basic part is pretty knarly with some heavy brick and mortarish aspects to it. The rest is pretty straightforward web stuff, I believe. Thanks! I'll try to get in touch with LaunchBox today. I'll drop you an email and you can see what I've got so far. So what is a fair split?

3 points by Choices 16y ago

aberkowitz 16y ago

The fact that the original people you talked to were not interested may be a sign that your idea need refinement. You shouldn't take the development group's interest as approval, as they get 100K regardless of your success. Before you continue, you should conduct focus groups with people who have knowledge of the subject area. Best of luck.

Choices 16y ago
When I was talking to the first couple of people, I hadn't really fleshed out the details clearly enough. And they really are happy in their corp jobs. Yes, they get the 100k, but I would probably keep more equity that way. I was surprised at how genuinely excited they became as they realized their own need for the web level features. And, of course, they immediately took it mobile.

charliepark 16y ago

$100K sounds like a lot for an app. With equity on top of that? I'd stay away. Can you build a prototype of it? Even in Excel or something to get the general logic worked out?

Choices 16y ago
OK, this is much more than just an app. It is capturing a lot of data at one level, then there is the 'web level' where the public interacts with it. Lot of opportunity for revenue at the public level immediately (targeted ads). Vendors will be pushing 'specials' down to the first level when they see the apps getting some traction.. .
- thomas11 16y ago
  Can you try to generate some test data first, and create a mockup of the web interface? A web developer can do that and add some interactivity step by step in relatively little time. When you have a vision of a finished product, it seems like so much work to get there. But usually you can break it down and find steps you can take iteratively. Mocking up the idea will show you more about its potential and how it should be executed once developers start working on it for real.
  - Choices 16y ago
    This is pretty much what I showed them. All the captured data, described how the apps work, what makes the data so valuable, etc. Like I said, they got it , but still made the case it was a lot of work.

moonpolysoft 16y ago

Sounds like you are going to get screwed if you go with the dev group. Especially since you will be talking to investors to which they will be introducing you. Keep pounding the streets to find your technical co-founder. Go to meetups and other events. It's just like dating.

Choices 16y ago
Damn, I would love to find some people to go with this. Problem is, in one sense, it's a fairly obvious service but there's only room for one of them (database, ground level), so whoever executes first owns the world (really :)
- moonpolysoft 16y ago
  I know you think your idea is the best invention since alcohol, but it probably is not. Given the choice between a half-assed execution of your awesome idea and finding the right person who can execute any idea I would choose the latter.

moonpolysoft 16y ago

Also I'd like to add that you should mention the name of the dev group. What they're doing is certainly shady, if not completely unethical.

Choices 16y ago
Well, they ARE a dev group and are customarily paid for their work. Also, this is pretty big and portions will be shipped overseas so there will be real costs incurred.If things get too weird, I'll post here.
togasystems 16y ago
That is not shady. It is business. They are throwing out a highball offer and will quite possibly negotiate to smaller deal.

mgkimsal 16y ago

Choices - I meant to write last night but got tied up. Being on that side of the table, I get their motivation. However, that sounds like a rather large amount of money. LaunchBox Digital - an incubator around here - gives teams $20k I think, plus connections and other resources. $100k is lot of money to develop a product. It's certainly not unreasonable if the specs call for it. But as someone else said, they're going to get paid regardless, PLUS they want future revenue from the idea. I think you should shop around some more, and I'd be interested in talking to you more about this. Contact me at mgkimsal@gmail.com - willing to consider a money/equity split, and probably not anywhere near a $100k deal. :)

Choices 16y ago
Yes, the basic part is pretty knarly with some heavy brick and mortarish aspects to it. The rest is pretty straightforward web stuff, I believe. Thanks! I'll try to get in touch with LaunchBox today. I'll drop you an email and you can see what I've got so far. So what is a fair split?