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Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

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Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#21

Post by tomh »

redorb wrote: post #11
tptacek wrote: post #8

Earlier quoted context omitted.

Why? Even at 35%, she's got much less equity than the original founder. If her market value is 80k, and they're taking salaries, what do you expect her to do? Talent is a marketplace. It isn't owed to anybody.

because she agreed to 6% and $6,900/mo (a lot more than the founder) ... I think loyalty means something, be loyal to what you agree to; or quit... but don't hold the whole company hostage being selfish. I still stick with the "better off without her" mantra here.

I think 6% is actually pretty sweet, I built a 1.0 for a startup from scratch while in grad school, and got all of a 0.5% stake, plus consulting fees. Usually a large slice of the equity pie assumes that you are taking a hit in the wallet now for something better down the road. I believe your developer felt like she was getting the best of both worlds.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#22

Post by tptacek »

redorb wrote: post #11
tptacek wrote: post #8

Earlier quoted context omitted.

Why? Even at 35%, she's got much less equity than the original founder. If her market value is 80k, and they're taking salaries, what do you expect her to do? Talent is a marketplace. It isn't owed to anybody.

because she agreed to 6% and $6,900/mo (a lot more than the founder) ... I think loyalty means something, be loyal to what you agree to; or quit... but don't hold the whole company hostage being selfish. I still stick with the "better off without her" mantra here.

How did she hold the company hostage? She did quit.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#23

Post by drinko »

tptacek wrote: post #8
redorb wrote: post #5

I think she made a "douche-move" by upping her equity forcefully while still taking $6,900/mo - To be honest no matter the turn out your better without her cause she is lacking integrity.

Why? Even at 35%, she's got much less equity than the original founder. If her market value is 80k, and they're taking salaries, what do you expect her to do? Talent is a marketplace. It isn't owed to anybody.

I had to take a salary, because I am 32 yr old experienced nurse and have monthly fixed costs that I can't get away from.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#24

Post by russw »

kyro wrote: post #3

Learning Django isn't difficult at all. If anything, learning Django will be a huge benefit even if you do find a Django coder. Not only will you be able to convey your ideas more efficiently by having an understanding of code, but I'm sure your coder won't feel as much of a slave. Learn Python first: http://openbookproject.net//thinkCSpy/ and for Django: http://www.djangobook.com/ If you're really dedicated to conti…

I agree, get your feet into your code. If you outsource it you'll at least know your app so you can manage it. Did you read the TC article about MyPlayList? http://www.techcrunch.com/2008/04/25/majority-stake-in-mypla... Maybe this is a route for you.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#25

Post by run4yourlives »

Ouch. I suppose the moral of this story is to make sure you draw a line between employee and partner right up front, and be very firm about the roles. Obviously, ee's get a paycheck and little else, and partners equity and a little paycheck. Sounds like you put yourself in the position where an ee could hold you for ransom. You were paying her a good salary, and she had no risk. Lesson learned huh?

So what do you do now? You need to sever the relationship with this person, first and foremost. How much work is there left to do? If it's less than 25%, outsource this (doesn't have to be india... many dev's will be ok to pick it up, especially if there could be an upside - in the future). You should/could learn django regardless, since you should be aware of what your system does in the end.

If you've got more than 25% to do, you should really learn to finish this yourself. I'm learning django and python at the same time, and honestly it isn't difficult if you have a programming background. Be aware that you may need to move this to the back burner and take a job to get by.. you won't be able to move as fast as she did. You may also be able to find some devs on YC here that might be interested in negotiating on more favorable terms. Not all programmers can look at things that way, but most here can.

Good luck to you, and if you see me on IRC (django) I go by the same user name.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#26

Post by tptacek »

tomh wrote: post #21
redorb wrote: post #11

Earlier quoted context omitted.

because she agreed to 6% and $6,900/mo (a lot more than the founder) ... I think loyalty means something, be loyal to what you agree to; or quit... but don't hold the whole company hostage being selfish. I still stick with the "better off without her" mantra here.

I think 6% is actually pretty sweet, I built a 1.0 for a startup from scratch while in grad school, and got all of a 0.5% stake, plus consulting fees. Usually a large slice of the equity pie assumes that you are taking a hit in the wallet now for something better down the road. I believe your developer felt like she was getting the best of both worlds.

That totally depends on the app, doesn't it?

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#27

Post by opportunity »

Hey Drinko, Normally when you give equity, their shares do not vest for at least 4 years. This is usually the case in most of the employee contracts. Also usually if any co-founder/employee leaves before an year she gets no equity. This is the standard.

As for getting the project finished, realistically learning django now is not an option. Outsourcing is an option but I wouldn't recommend it. You don't want to outsource your development at this early stage in your company.

Your best bet to getting the project finished is to threaten to fire your current developer. If she is fired before 12 months, she does not get any equity. Don't repeat the mistake of giving more equity/money to a third-grade developer who hasn't been able to get a working prototype in 12 months.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#28

Post by tptacek »

drinko wrote: post #9

i am near Tulsa, Oklahoma. We have a prototype, but not one I would be able to release, as it needs a lot of user interface refining. It is an online web app service for patients with chronic conditions that helps them manage their problems and has some social network features. (I am a nurse)

If the backend and basic interaction works, there are tens of consultancies who can turn it into a presentable, usable, launchable web application. For a complex application, you're probably looking at 15-25k.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#29

Post by redorb »

tptacek wrote: post #22
redorb wrote: post #11

Earlier quoted context omitted.

because she agreed to 6% and $6,900/mo (a lot more than the founder) ... I think loyalty means something, be loyal to what you agree to; or quit... but don't hold the whole company hostage being selfish. I still stick with the "better off without her" mantra here.

How did she hold the company hostage? She did quit.

"threatened to quit and raise her own funding" unless equity was raised to 35%, that is very very hostile. - she only quit once they ran out of money., actions just speak louder than words for me.

Re: Ask YC: Startup crisis. Out of money and tech co-founder has bailed.

#30

Post by tptacek »

drinko wrote: post #23
tptacek wrote: post #8

Earlier quoted context omitted.

Why? Even at 35%, she's got much less equity than the original founder. If her market value is 80k, and they're taking salaries, what do you expect her to do? Talent is a marketplace. It isn't owed to anybody.

I had to take a salary, because I am 32 yr old experienced nurse and have monthly fixed costs that I can't get away from.

I'm not criticizing you for taking a salary. I take a nice one. I'm just saying, you're not working on "2 people in a garage" terms.
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