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>> I recently walked away from a potential startup because my non-technical partner (MBA ideas guy) wanted an 80/20 equity split in his favor. I was the first t
by TuringNYC 1y ago
>> I recently walked away from a potential startup because my non-technical partner (MBA ideas guy) wanted an 80/20 equity split in his favor. I was the first to broach the discussion and proposed 50/50.
I'm constantly approached by "business guy" with deals like this. Here is the truth -- even 50/50 isnt enough because technically, the tech-co-founder is often doing all the upfront work and taking all the upfront risk. The business-co-founder gets a free option to do work (or not) afterwards. All upside and little downside.
IMHO good business co-founders are worth gold and make their worth obvious. They already have POs lined up, they have partnership agreements already in the works, they have VCs willing to invest based on past performance. Perhaps they already tried the business with some overseas teams doing POCs. Perhaps the business co-founder already has exits or a successful business and is willing to pay the tech-co-founder some nominal amount to show skin in the game. Those are all good signs.
If those arent the case, and the "business-co-founder" is sitting back while the other is hard at work coding a prototype -- you dont need a co-founder. Just be the CTO+CEO and hire the "business" work yourself!
In the absolute worst case, i've seen a "business-co-founder" continue to push the definition of MVP more and more and the "tech-co-founder" seeing the sunk-cost of the work they have put in, continues to ever-expand the MVP. Meanwhile the "business-co-founder" gets months or a year of free labour with a free option to participate -- or not.