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We are 3 co founders and we have 33/33/33.
I want to quit it in 2 months and we are currently in the process to raise 500K for 25% before the end of the year.
Is it reasonable for me to keep 10% of it. - They think it's way too much.
Sell to them 10% right now - How much??
Sell 13% of it after the 500k raised - How much??
Thanks!
Experienced founders also have vesting periods. It entices founders to stay, and is a fair way to value a founder's work when they leave. Typical 4 years with major events triggering a full vest.
$500k raise doesn't qualify here.
Each partner in your case is 1/3, presumably you are all considering yourselves at the same market rate, so your time spent is the same.
If you were to have done a 4 year vest, you would be getting 1/3rd of your shares at 16 months.
It's fair for you to receive 1/3rd of the current 33% of shares which is even more than 10% today. However, expect to be diluted down as the vesting for the other partners continues.
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Here's another way to look at it without retroactively creating a vesting schedule.
Each of you have contributed to 1/3 of the business, entitling you to 1/3rd now. Going forward, the remaining founders will be incentivized to stay by having new shares allocated to them.
Say, in 16 more months, the number of shares allocated will be double what it is today, and split between the two remaining founders. Your size goes down, but in proportion to the value that you are no longer creating on the business.
In this scenario, you need to work out that future allocation before you finish the 500k raise.
https://ozar.me/2015/12/what-does-it-mean-to-buy-out-your-pa...
The first thing to do is read the startup's legal agreements. In our case, when we started the company, we agreed that partners (owners) could not participate in a business that competed with our own. You could leave at any time and do something competitive - but if you did, you thereby let go of your ownership. (You may also have a vesting schedule.)
If it's not obvious to you what your legal agreements mean, get a lawyer. Most lawyers will talk to you for 30 minutes for free to decide if it makes sense to hire them. Hiring a lawyer won't be cheap. You need the lawyer to tell you if you can simply walk away from the company and retain all of your ownership. If you can, then just ask the remaining partners, "What would you like to pay me to buy out my ownership?" It's simply a matter of what you're willing to accept.
Don't get hung up on valuing what the company will be worth in the future. If you can't agree on strategy, you won't agree on a valuation, either. Just ask them what they're willing to pay, and see if it lines up with what you'd accept. If it doesn't, and you can retain your ownership, and you believe the company will be worth a lot in the future, then walk away and keep your ownership.
But if you don't have that legal ability to keep your shares, then be prepared to accept a cup of coffee and a smile, and that's about it. (In our case, I bought out my cofounders because it was the right thing to do, but don't expect your partners to do the same. It's just a matter of character and your negotiation skills.)
There's nothing to stop the other founders from doing the exact same thing you are doing - leave and retain the company. Give them a compelling reason to stay.
If you own 33%, you own 33%. That can't just be changed arbitrarily.
You shouldn't care about what other people think is "too much". Keep your 33%/25%-post raise if you can (assuming there is no cliff in your vesting and you had your shares from the start).
Except for one situation: if the remaining partners don't believe the company is worth much, and you believe it'll be worth a lot, then that's the perfect time to buy THEM out. (Especially if you're having disagreements over strategy, and you believe you have a lot invested in the company.)