Someone who knows "criteria" is a plural word. The singular is "criterion".
Also someone who is not excessively pedantic.
Ask HN: What are your criteria for selecting cofounders?
11–20 of 30 posts
Re: Ask HN: What are your criteria for selecting cofounders?
#12Here's my best tip: Make sure they are in a similar life situation. ie. Wealth, kids, family, etc. If one of you has three years of life savings and one of you needs money in three months, that will affect your decision making. If one of you wants to take weekends off to go to the kid's soccer games and the other one wants to go out and drink on Friday afternoon, you had better figure that out ahead of time and make…
Is it important for both people to sign a vesting schedule from day one? This seems like a surprisingly common scenario: The initial agreement is a 50/50 split, and then a few months down the road one or both founders feel that 50/50 is no longer fair. If a vesting schedule is signed, you never have to think about this or revisit it. The point of a one year cliff is that you can say "Ok" without worrying whether the…
Yes. Never enter a business relationship with someone without setting those terms, in writing, before you begin. Likewise, don't dilly-dally around with starting as a "side project" with the real, secret intention of starting a business. If you suddenly think a project is a business, then from this day forward, you set the terms in writing, then proceed. Nothing from before the decision point matters, even if you've kinda-sorta worked on the "side-project" in various capacities for years. Just make a decision, divide the equity, set the vest, write it down, and move forward with confidence.
You don't necessarily need to have a full "legal document" at this point (unless actual money is involved -- then get a lawyer or service and do it correctly), but you do need to have the terms of the agreement clearly documented from the start. If you can't handle this conversation, you can't handle business. There are going to be far more stressful conversations in your future, and this stuff is table stakes.
The good news is that this is all so standard now that you shouldn't spend more than 30 seconds on vesting: "standard 4-year vest, 1 year cliff, starting from today." Anything more complicated or deviating from this is a strong sign that you're Doing It Wrong. In certain situations (i.e. you didn't follow this advice and worked for a while before formalizing the agreement) you might set the vest start date to something other than "today", but again, it's a warning sign. Try as hard as you can to be boring.
Re: Ask HN: What are your criteria for selecting cofounders?
#13Ability to sell. Sell product to customers. Sell company to investors. Sell organization to potential hires.
Re: Ask HN: What are your criteria for selecting cofounders?
#14It’s almost impossible to reduce the criteria in finding the right cofounder. Likely the ideal candidate will also look at other person with an equally critical eye as well. I’d say serendipity and chance occurrence that the business is something you both want to work on and find regular intervals of success are probably determinants in deciding (retrospectively) if the cofounder was right.
Re: Ask HN: What are your criteria for selecting cofounders?
#15[deleted]
Re: Ask HN: What are your criteria for selecting cofounders?
#16You really need to know how they are going to hold up under adversity (you will face adversity). I have always thought the idea of going on some sort of difficult adventure (long trek through harsh terrain) is a good way to see how they will hold up.
Re: Ask HN: What are your criteria for selecting cofounders?
#17Each co-founder relationship is different, but there may be some items below of use to you.
1) Find someone who can be on the same wave length as you for 1-3 years, at least in terms of what you both want, how hard you can work at it, etc. A co-founder relationship is harder than marriage. A lot of it due to getting on the same page, and staying on the same page for 3-5-8 years isn't always easy. My marriage is much easier because of all I learnt about having and being the best partner I can be and always improving.
2) Date before you go steady, before you get married. If you meet someone interesting, try a practice project together. Too many hackathons are about making a baby over a one night stand and putting on rose coloured glasses.. Still, would you open a bank account, move in with, and get married to someone you speed dated over a weekend?
3) Focus on short-term and healthy partnerships on small projects at first. They will become long term on their own.
4) If it's all going to hell, it's going to go to hell no matter what you do, or don't have in writing.
5) Make sure your work ethic and philosophy is the same. Being effective is critical as is delivering results, being responsive, available. A startup is a baby. Don't feed it, it won't grow.
6) Don't make co-founders out of loneliness or to add people to the mix. The potential 1+1 should always equal 11 with cofounders.
7) Success in startups (and business) is about discipline, execution, focus, and doing what needs to be done, not just what's shiny or interesting. If the average maturity of co-founders is not high or strong enough, it will be hard.
8) If your potential co-founder has shiny object ADD, take that into consideration.
9) Hang out with people you can develop fierce trust and loyalty with. You can go much faster, then.
10) Vesting for shares is good. It's OK to tie it to a Harvest timesheet in the beginning. All shares are worthless unless anyways they make them valuable.
11) If you have a business development (sales) co-founder, it's not unusual to have their top line sales vest/convert to a certain percentage of equity. As a technical founder, I know I can build and deliver. I expect the sales guy to be able to deliver sales, or the only thing of value that's created (IP), falls back to the people who built it.
12) Some people will say partnership is about leverage, ultimately. This is true to some extent, however, I wonder if it should be about partners leveraging and exploiting an opportunity, instead of each other.
13) Partnerships like marriage are not measured in the good times. They are truly shown in challenging times. Being able to communicate in tough times is really critical.
14) Despite the above, learning to work with others is an invaluable skill. Just don't bank too much on others. You'll do good, and meet others who are doing good. Ignore talkers, only pay attention to doers.
Re: Ask HN: What are your criteria for selecting cofounders?
#18Here's my best tip: Make sure they are in a similar life situation. ie. Wealth, kids, family, etc. If one of you has three years of life savings and one of you needs money in three months, that will affect your decision making. If one of you wants to take weekends off to go to the kid's soccer games and the other one wants to go out and drink on Friday afternoon, you had better figure that out ahead of time and make…
Is it important for both people to sign a vesting schedule from day one? This seems like a surprisingly common scenario: The initial agreement is a 50/50 split, and then a few months down the road one or both founders feel that 50/50 is no longer fair. If a vesting schedule is signed, you never have to think about this or revisit it. The point of a one year cliff is that you can say "Ok" without worrying whether the…
My thoughts on equity boil down to these two rules:
1) Always split evenly amongst cofounders
2) Always have a vesting schedule with no cliff.
Reasoning: For number 1, there is no need to start off with a battle about "who is more important" or "who contributed more". These things don't and won't matter down the line. There are basically three ways a startup ends:
1) Total failure, in which case the equity split doesn't mean anything.
2) Great success, in which case the equity split doesn't really mean much, because does it matter that you got 10 million and your cofounder for 12 million? Or
3) A meh exit. This is the only place where the equity split might matter, because maybe you'd get $750,000 to and your cofounder would get $1M. But even then, chances are since you aren't retiring off of that exit, you'll probably do it again, and do you really want to have that lingering "she got more than me" feeling, especially if you might work together again?
As for number two, the reasons for vesting schedules are covered elsewhere (in case someone leaves for any reason) but as for the no cliff -- I don't really like cliffs in general. You did the work, you should get the equity. The main reason to have a cliff for an employee is because it's a legal hassle to have a lot of small equity holders, so you want to prevent the folks who didn't work out from holding any equity. But that doesn't apply to a cofounder. You will already need them for a bunch of other legal stuff anyway, and having one or two extra shareholders really won't make much difference. And besides, even if they leave after two months, at least if they have shares they have a vested interest in your continued success.
Re: Ask HN: What are your criteria for selecting cofounders?
#19Doers[1]. Aka, people who act. move mountains. get stuff done.
Re: Ask HN: What are your criteria for selecting cofounders?
#20Here's my best tip: Make sure they are in a similar life situation. ie. Wealth, kids, family, etc. If one of you has three years of life savings and one of you needs money in three months, that will affect your decision making. If one of you wants to take weekends off to go to the kid's soccer games and the other one wants to go out and drink on Friday afternoon, you had better figure that out ahead of time and make…
Is it important for both people to sign a vesting schedule from day one? This seems like a surprisingly common scenario: The initial agreement is a 50/50 split, and then a few months down the road one or both founders feel that 50/50 is no longer fair. If a vesting schedule is signed, you never have to think about this or revisit it. The point of a one year cliff is that you can say "Ok" without worrying whether the…
I guess even with equal ownership it would be beneficial to decide who has the final say on things. "A pirate ship has to have a captain." Rather have the business die because of bad choices than the inability to make choices.