Would like the thoughts of the blind community on this critical decision. My startup: I’ve been working on it for 6 months since leaving Uber to work full time on this. Have a decent angel investment that I’ve used to pay contractors to build the MVP. There’s 2 other partial cofounders (eng and PhD expert in the field we’re working on). I’m still the only full-time founder. I’ve started talking to one potential cofounder who’s an MBB consulting manager (top 3 consulting firms) about joining to be the business leader who also does the sales, marketing, partnerships, that are critical to the startups success. This individual is really good (I know personally) but is demanding 45% to my 55% in order for them to join full time. I’m a Data scientist myself and have come up with the idea, designed the entire product, and have managed the development of an almost finished MVP. The data science aspect of the startup is the main value prop, but without users that we’d get from partnerships and marketing, there would be no valuable data. So while this person isn’t technical, their function is still important. Thoughts?
If he truly was your co-founder I would advocate for 50/50 ; if he joins later and you are past MVP and start having traction, it is a totally different game: first off he would not have a title of co-founder and second I would offer a stock plan any other key employee might have (I.e. a few %, may be up to 5-10 if he truly is remarkable, vested over 3-5years with a 6-12 months cliff)
This, he’s a cofounder, at this point both of you have so much more work ahead.
I definitely see your point and to “new” I’ve also heard this from Sam Altman. My point is though I am already 6 months into my full-time work, I will have a finished app in both app stores (MVP) by the time this cofounder joins, and already have a lot of progress on so many things. If they join now, should they really get 50%
Too much. I’ll do it for 20%. But seriously, it’s a tough decision that you really want to think on. You don’t want to cheap out and get some third tier talent that will do a third tier job. If you are really set on this person and you’re sure they’ll be able to execute well, set contingencies and try to counter for a little less. Good luck!
Thanks!
How much would you pay a person of his/her caliber? How much specifically in the industry? Maybe you consider raising another angel round and focus trading share for money, with a longer vesting gestation based on performance. I've ran into people that are amazing and comfortable in Industry X but poor performance in Industry Y. Worse case is it cost you more cash but less headaches, especially with legal if it doesn't work.
Consultants are only good for making PowerPoint decks and excel modes. Outside of that they’re useless
Agreed! However, some have insider knowledge, experience and relationships. Getting one whom has access to decision makers and having their trust is worth it, so long as they close the sale!
A good business person can make or break it. Thousands of great ideas and prototypes die in obscurity due to lack of marketing and business acumen. If they’re really that good and have had experience in this type of a situation, it’s a good investment. Though what are your other co founders asking for?
A McKinsey consultant != a good business person Especially not in a startup setting. These folks are status/prestige whores whose only value is building powerpoints and excel models
The other cofounders are alright with having smaller percentages since they are not full time and still keep their day jobs. When I say 45-55 split, I’m referring to just the allocation between myself and the other full-time person which would be this consultant. But that is a good point and part of the equation too. If I give the business person 45% there will be fat less equity to bring on the engineer to be full time or future technical teammates
OP are you a citizen ?
You realize you need to save equity for early employees as well right? This guy asking for 45% is out of his mind. Unless he already secured a $1m contract I’d tell him to take a hike. Also keep in mind the skills you use in MBB do not always translate to startups. These folks typically flounder in those roles and spend time on things that don’t matter
That’s a very good point. That’s my main hesitation about this. Its not that I selfishly just want more equity for myself, but I want to make sure there will still be enough to motivate an engineer or DS to come onboard soon as well
Give like 8-10% of it on day one, but the rest should need like refreshers. Tie the refreshers to a vesting schedule of 4 years and make it contingent on performance.
Well, we’re all doing standard vesting schedules including myself as the founder with a 1 yr cliff
Or rather don't hire this guy. He's unreasonably greedy. He wants 45% without having lifted a finger. Imagine what he will ask for once he does something!
😂😂😂 good point, I love it. I’m annoyed by it too, people asking for so much before they actually do anything
Too much. Tell him/her to kick rocks