Equity / terms for a co-founder + Timing of raising money

New Sugary
Dec 23, 2018 10 Comments

I am a sole founder of a startup. I have spend few months on an idea and have executed a simple MVP. I am technically adept but not a complete hardcore techie.

I know someone who is exactly that - who has extensive experience in building up large systems on various stacks and putting them in production.

1>> I am confused about the Equity and Compensation terms for him. Added to the mess is that he is on H1b, which means will have to shell out a salary as well. The fact that he is a friend also adds to the confusion - will offering something like 10% plus CTO be offensive ?

2>> I would like to raise some money now - at least to fund a year of R&D , let’s say 200-300K at least. Will now be a good time or should I develop a detailed MVP and at least some real customer feedback data before pursuing investors ? Even for offering him an H1b I will need to show some money ideally.

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TOP 10 Comments
  • Google / Product 🔥 iced
    I would walk away if I was your friend, and never look back
    Dec 23, 2018 5
    • New Sugary
      OP
      Interesting, thanks. With a 4 year vesting cycle and a cliff, shelling out a higher stake makes sense
      Dec 23, 2018
    • Facebook Seft
      IMO the article is right. It's better to find a partner who you consider your equal. And not jump in with someone you don't. This is going to be a long journey (and adventure). You need someone else you trust absolutely to make it with you.
      Dec 23, 2018
  • Amazon Antmann
    Perfect recipe for losing the business and frriendship. Find someone else.
    Dec 23, 2018 0
  • New Sugary
    OP
    On the related topic of finding someone else, does it make sense to outsource the design and implementation of the final MVP (I will remain heavily involved) ?
    Dec 23, 2018 1
    • New mdGG61
      Investors will trust your company more if the tech was done in house. But if you outsource and are able to show signs of product market fit, that's positive too.
      Dec 23, 2018
  • New nory
    OP - Checkout Unshackled Ventures. It's an accelerator/program here in Sil Valley. They invest up to $160K and sponsor your H1B so you can work on growing your startup.
    Dec 23, 2018 0

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