4 ms·
My last startup was founded by 4 people with equal shares and rights. We failed early partly because we couldn't go into a clear direction, too many votes, too
by bartman 16y ago
My last startup was founded by 4 people with equal shares and rights. We failed early partly because we couldn't go into a clear direction, too many votes, too many opinions. We didn't turn out to be a well matching team either, though.
For my next startup I wouldn't do equal shares again, someone needs to be able to have the last word.
edit: Initially we started with 2 people with equal shares, and got two others in shortly after launch. We did an even split then, although in retrospect 30/30/20/20 would have been better. That is if you don't depend entirely on your newcomers.
- jmathai 16y agoThe 30/30 would still be a problem though (from experience). There needs to be one visionary who has the final say. Help prevent fights and wasted time.
- bartman 16y agoI agree, I think it might have worked for our case though because my initial cofounder was more business focussed and I was the technical one. He stood behind my technical/product decisions.
- arethuza 16y agoWe had 40/40/20 - which wasn't too bad (indeed, I made the call as to who the CEO would be - the "business" guy with the 20%). Unfortunately this turned to be absolutely the right thing to do in the short/medium term but a disaster in the long term.
- bobds 16y agoWould you care to elaborate on the long term disaster part?
- brudgers 16y agoI was in a similar situation, it was 46/46/8. 46 and 46 were "married" due to their mutual investment. I was the 8. It's what I negotiated to come on board. No vesting. There was casual mention of a purchase. I controlled a third of the company because 46 + 8 could sell. It was a paranoia fest. I had to go in order to save the "marriage." They are still "married" today. And at the time, I would have cashed out on the sale in a New York minute.
- arethuza 16y agoI started typing an answer but it became a rather pointless rant.... even after nearly a decade these things can still make my blood pressure spike.
- jonp 16y agoYou could deal with "someone needs to be able to have the last word" without changing the shares of equity. The split of voting rights doesn't have to be the same as the split of financial ownership.
- robwgibbons 16y agoThis is what we did for our startup. Started with 2 people, added a third later. 1/3 profit sharing, but only the original 2 founders have voting rights.