Stupid Cofounders

You mad bro?

After 5 years in, this is fairly accurate. Our 3 founders, are +/- 5% of each other. The rich guy who was at the top of the food chain in the corporate gig, put a little more money in up front a got a little more. The tech guy came in as the same time as the rich guy, and got more than the business guy who joined 4 months later.

For all it took to get to be successful, thinking it should be anything other than equal is wrong. However, I think it's natural to view yourself in some sort of hierarchy when forming (without prior experience in forming a company from scratch), thinking it should be equal down the road is sort of Monday morning quarterbacking.

You're an idiot and unrealistic. And by the way, one of the best ways to guarantee failure is for two people to go 50/50 and imagine they have equal say over everything. That's why so many marriages end in divorce. With startups already doomed to fail for so many other reasons, your equality proposal is just like giving it a guarantee for failure.

Truth: somebody always brings more to the table than the other(s). Somebody is always the irreplaceable one.

If you create a business that relies on continued equality through its life cycle, you are planning for eventual failure.

This post is bullshit. I gave my cofounder 50%. I put in all the money and 3x the work. He was a lazy mother fucker. I had to fire him. Fortunately I protected the company with a vesting schedule so when I had to fire him it was relatively painless

TL;DR; good people aren't externally motivated.

OP sounds bitter, and unsophisticated.

2 people = 100%

5 people = 100%

Confused ? So am I. :)

You need to run your own company without anyone else if you think and feel that way. When you're on your own, you will find out very quickly how much value you add on your own. In a perfect world, it would be 50-50, but there is always a co-founder that goes above and beyond what the others won't do. There is always one who will sacrifice everything to make the company work... then, there's people like you who focus so much on the pay out that they miss the opportunity to earn more equity, that they miss out on the opportunity to learn and be better.

Investors and your work is paid through your work, not your equity split.

If you want to know what fair compensation looks like, start with 50-50 then Ask yourself:

1) Who had the original idea?

2) Who puts in the most money? Truthfully, it's not a loan until you actually make revenue or get investment. Think about it... that money is gone if nothing happens.

3) Who is truly invaluable? If this person leaves, will the company cease to exist.

4) Who is building the network and making the sales calls?

5) Who pitches investors?

Add 10 points for each answer in favor of the party that does it. You'll find out quickly even if you both do the job, someone will always do more than the other and if you are both doing all 4 of those things, you're doomed to fail. It sounds like too many chiefs and not enough indians.

Immature co-founders start off thinking they are entitled to the whole pie or equal pie because they are so greedy and distrusting, but it comes down to the work you are going to put in. If you feel your cofounders aren't pulling their weight, do them a favor and yourself - walk away before all the wheels fall off.

The one point you never covered is time spent. You talked about money, original idea e.g. But not on time spent working. Why have you not brought that up? Usually that's the point that starts any disagreement one person not pulling their weight and others picking up the slack.

“If your cofounder(s) have more equity than you, you are stupid.”

No foo, <em>you’re the stupid one</em> for making a blanket statement on an issue which very much depends on the circumstances.

“It doesn’t matter who brings what to the table. Everyone is starting at ground zero.”

See above. Eg a part time team member who joins 1-2 years after the company’s established was & is not at ground zero.

“If there was enough value created before you joined you probably shouldn’t be a cofounder.”

“Cofounder” shmofounder; all semantics and ego. Plain and simple: if you were not present when the company was started, then you’re not a cofounder. You are an early employee/management/team member, and nothing wrong with that.

Issue on salary vs more equity is quite simple: Regardless of whether we structure it as a loan or not, if you want more equity, then take the risk and forego the salary. Otherwise, any money spent directly on business should be structured as loan without increasing anyone’s equity.

“If there is no equality, there can never be the same passion”

Negative. I’d be happy with a minor stake on a rocket ship, especially when I’m taking less risk (eg salary, joined later, etc) while still getting the full experience. And even if on ground floor, true maturity is knowing when you can step up to the leader plate or when someone else is better suited to it and if so, then being an equally supportive partner/colleague. Each ship needs a clearly defined leader.