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> and retains the right to take all the upside and has none of the downside When you are paid in equity, the non-technical cofounder doesn't have all of the up
by gnicholas 3y ago
> and retains the right to take all the upside and has none of the downside
When you are paid in equity, the non-technical cofounder doesn't have all of the upside. But I completely agree that both parties need to bring something to the table at the beginning. It can't be "you build something and then after you've done that I'll go sell it". Both founders need to be putting in sweat equity simultaneously, to align incentives.
- TuringNYC 3y agoI think we are in agreement. To elaborate more -- you are right, "the non-technical cofounder doesn't have all of the upside" -- I mean "they have all upside" meaning, they can only go up -- they have contributed nothing so everything for them is upside.
- gnicholas 3y agoYeah, I think the difference is between "they have all the upside" and "they have only upside". You shouldn't agree to either of those situations — they should be putting in sweat equity alongside you. But there's a big difference between them, since all founders end up with some upside — if you don't, then you're employee #1 (and even then, you're probably still getting a couple percent).