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Have him or her prove his worth over the next month as a trial. No compensation or promises, equity or otherwise. Business co-founders are generally great at ta

Have him or her prove his worth over the next month as a trial. No compensation or promises, equity or otherwise. Business co-founders are generally great at talk, but less so at action. It's stereotyping I know, but its a generalization based in fact. They aren't as in demand as the technical side, and are generally more willing to work for free. Of course, saying "I'd like you to work for free without any compensation this month" won't sound good. Try "I'm skeptical of the need for a business cofounder, so I'm giving you the next month to show me that you're critical to success." At the end of the month, you'll likely either think "well, it doesn't look like he(she) did anything I couldn't do" or "wow, there's no way I can do this without him(her)". If it's the latter, give up 30% of your company vested over a few years.

lowglow 16y ago
So you'd say 30% vested over how many years? He's got a pretty good track record and claims he can introduce me to all the right people. He's thrown out some names, and seems like a pretty legit and nice guy. I'd essentially like to keep developing the idea while someone else is out building business relationships and structuring the business.
- bdclimber14 16y ago
  I think 15-40% is a good range. Less than that and they feel like they are just an employee with stock options, but more is dangerously close to equal. You want them to always know who's boss :) I'd also get references without asking. If he claims to play golf with someone big, track them down and see if they say the same. Ask around and see what his friends say. Track record is huge. Make sure the measurable successes match the hype. I'd say 2-3 years is good to vest. You'll know by then if the business is failing or not. Things could also change if you get investment. Definitely delay bringing him on board so you can cultivate a friendship and vette his work ethics. Its a lot easier to not hire someone than it is to fire them.I'd say try and spend lots of time together for the next couple months if you just met him. Make him make sacrifices.
lachyg 16y ago
Switch the thing round. I've got a business idea, all written out and documented. Someone wants to be my technical co-founder. Are you suggesting the same thing?
- bdclimber14 16y ago
  Late reply, but I ironically was thinking the other night if this should work conversely. For most points, I think yes. One notable difference is that developers will create something tangible, and usable, within a month or two. It could be enough to raise money off of. In this case, I'd say there should be equity structure in place at the beginning. Business co-founders would provide value in a month, but its probably through intangible relationship assets. The value by a business co-founder is also something that is ever-expanding. If he or she made 100 sales in a month, you'd never say "Well, that's all we need, have a nice life" but with applications, some people may see them as "done" and therefore you don't need the developer any more. Anyone who understands that software is never done in a startup would disagree, but its less obvious, especially to business founders, that this is true.

lowglow 16y ago

So you'd say 30% vested over how many years? He's got a pretty good track record and claims he can introduce me to all the right people. He's thrown out some names, and seems like a pretty legit and nice guy. I'd essentially like to keep developing the idea while someone else is out building business relationships and structuring the business.

bdclimber14 16y ago
I think 15-40% is a good range. Less than that and they feel like they are just an employee with stock options, but more is dangerously close to equal. You want them to always know who's boss :) I'd also get references without asking. If he claims to play golf with someone big, track them down and see if they say the same. Ask around and see what his friends say. Track record is huge. Make sure the measurable successes match the hype. I'd say 2-3 years is good to vest. You'll know by then if the business is failing or not. Things could also change if you get investment. Definitely delay bringing him on board so you can cultivate a friendship and vette his work ethics. Its a lot easier to not hire someone than it is to fire them.I'd say try and spend lots of time together for the next couple months if you just met him. Make him make sacrifices.

lachyg 16y ago

Switch the thing round. I've got a business idea, all written out and documented. Someone wants to be my technical co-founder. Are you suggesting the same thing?

bdclimber14 16y ago
Late reply, but I ironically was thinking the other night if this should work conversely. For most points, I think yes. One notable difference is that developers will create something tangible, and usable, within a month or two. It could be enough to raise money off of. In this case, I'd say there should be equity structure in place at the beginning. Business co-founders would provide value in a month, but its probably through intangible relationship assets. The value by a business co-founder is also something that is ever-expanding. If he or she made 100 sales in a month, you'd never say "Well, that's all we need, have a nice life" but with applications, some people may see them as "done" and therefore you don't need the developer any more. Anyone who understands that software is never done in a startup would disagree, but its less obvious, especially to business founders, that this is true.