161–170 of 435 posts
Earlier quoted context omitted.
It's the plot of a movie that nobody on this thread wants to watch, but that doesn't make it bad advice.
Advising to give up while there's still room to negotiate sounds like bad advice. At the worst, OP could turn this into a learning excercise on how to negotiate in a tough situation, with zero downside compared to the advice given here. This doesn't have to be a protracted legal battle, but reading up on documents they signed, figuring out their proiories (continue in biz? get at least some value out? etc) and negoti…
If necessary add hooks into revenue and a framework for a future buy out.
But def don’t waste time around someone who doesn’t want to work with you.
Can I give you some advice that really sucks? Walk away. It's not fair, but starting a company isn't like getting a job. It's a relationship and a risk that doesn't always work out. Sometimes you find more money and success than you could ever dream of, and other times you waste 11 months. Here's my thought process. You and your cofounder aren't going to be able to work together after this. The company has no money a…
I disagree - keep the 40%, this will at least force them to come to you with why they want you to leave. The obvious answers are - they are a jerk to work with and they won't admit it - you are a jerk to work with and they won't tell you - something else If it's something else and there is real money at stake both of you should be able to work something out. Otherwise it's one of the first two - which is much harder…
Also, I don't know for sure, but I imagine they know the reason (even if they don't agree with it).
Earlier quoted context omitted.
> Them raising money to pay you just kills their chance at ever being successful > there's no way they can build a company when someone not involved owns a huge stake. So what? That sounds like their problem, not his. > But I'm 99% confident you won't get anything out of this, so it's best to just walk away. Possibly. But is that is the case, why not just keep the 40%? He's got nothing to loose. So in that case, ther…
From a purely legal perspective, this is incorrect. He's on a vesting schedule, and currently has 0% (his cofounder also has 0% currently, assuming they started at the sam time). They both entered this agreement to only get ~40% if they work there for 4 years (and at that point, they'll likely have to revest). Vesting schedules were created for this exact situation.
If the choice is between "giving up" or getting as much equity as possible, for example by stalling for a month until he vests, but also causing those other problems that you mentioned, then the choice should be clear.
Stall, and get the larger amount of equity. He's got nothing to lose, right? If you have nothing to lose, then there is no reason to not take as much as you can.
I don't think it is some costly effort to simply stall for a month, and refuse any deal. He doesn't need a lawyer or anything. He can simply refuse a deal, and continue "negotiating" until he vests and gets his guaranteed 10%.
Did they really pose it to you that way of take the 3% or they'll torch the company? Was it just a bluff because they'll own nothing too? I would talk to a lawyer and possibly the seed investor, but the lawyer first.
The seed investor is remaining neutral. It's not so much that they'll torch the company. They're just saying they don't have the cash so need to reduce my stake. They will budge on the 3% I'm sure, but I don't value the equity much if I'm not involved. I'm not too sure what a lawyer would recommend at this point? I also can't really afford one personally - especially as I may be out of work soon haha..
The trust is fundamentally broken, so it's not really worthwhile to pursue this as collaborators. Unless you're keen to run the business yourself, there isn't much point in fighting this beyond getting your 1st year vesting.
It's honestly not worth your time and energy fighting for something you're not keen to do. And it's definitely cheaper for them to give you 7% more than the 3% offered, and avoid all this hassle and potential legal expense.
If you do want to persist, then you need the investor on your side, as otherwise you can't force the other person out (they'd still keep their 10% but that's the price you pay for that move).
I have to say I find it really odd that someone who's invested $100k is being silent on this, or isn't worried about this situation, especially if the future of the business is now more of a lifestyle business. I fail to see how they'd get a return they'd expect. I'd assume they're actually on the other side, but want to appear neutral.
FWIW if you end up leaving, I'd advise not agreeing to a non-compete or a non-disclosure. It's not about you starting a competitor, but more about them not being able to restrict your future options as they're forcing you out, and they will have to potentially consider the threat of you competing with them at any point in the future.
It's a credit to your efforts that you've built the tech of business that's gotten such good traction and numbers, so you've got learnings and experience that will serve you in good stead in the future.
It's just unfortunate that you ended up with such shitty partners.
Good luck, and I assume quite a few of us will be hoping you bounce back from this, and rooting for you.
Earlier quoted context omitted.
> Them raising money to pay you just kills their chance at ever being successful > there's no way they can build a company when someone not involved owns a huge stake. So what? That sounds like their problem, not his. > But I'm 99% confident you won't get anything out of this, so it's best to just walk away. Possibly. But is that is the case, why not just keep the 40%? He's got nothing to loose. So in that case, ther…
From a purely legal perspective, this is incorrect. He's on a vesting schedule, and currently has 0% (his cofounder also has 0% currently, assuming they started at the sam time). They both entered this agreement to only get ~40% if they work there for 4 years (and at that point, they'll likely have to revest). Vesting schedules were created for this exact situation.
Can I give you some advice that really sucks? Walk away. It's not fair, but starting a company isn't like getting a job. It's a relationship and a risk that doesn't always work out. Sometimes you find more money and success than you could ever dream of, and other times you waste 11 months. Here's my thought process. You and your cofounder aren't going to be able to work together after this. The company has no money a…
I disagree - keep the 40%, this will at least force them to come to you with why they want you to leave. The obvious answers are - they are a jerk to work with and they won't admit it - you are a jerk to work with and they won't tell you - something else If it's something else and there is real money at stake both of you should be able to work something out. Otherwise it's one of the first two - which is much harder…
Earlier quoted context omitted.
I'm sorry but this is a ridiculous advice.
on a side note: what is the amount of karma required to be able to downvote on HN?
https://github.com/minimaxir/hacker-news-undocumented/blob/m...
Can I give you some advice that really sucks? Walk away. It's not fair, but starting a company isn't like getting a job. It's a relationship and a risk that doesn't always work out. Sometimes you find more money and success than you could ever dream of, and other times you waste 11 months. Here's my thought process. You and your cofounder aren't going to be able to work together after this. The company has no money a…
I disagree - keep the 40%, this will at least force them to come to you with why they want you to leave. The obvious answers are - they are a jerk to work with and they won't admit it - you are a jerk to work with and they won't tell you - something else If it's something else and there is real money at stake both of you should be able to work something out. Otherwise it's one of the first two - which is much harder…
And I think that is also the best option. Just mentally evaluate the ROI of this project to zero, and try to focus on something else now. With startups you got to get used to the fact that failures and misinvestments happen.