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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.

#51

Post by redorb »

tptacek wrote: post #39
redorb wrote: post #29

Earlier quoted context omitted.

"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.

I don't get it. This isn't MTV's The Real World: Tulsa Edition. She didn't like the deal she had. She told the founder, whose stake dwarfed hers, what her issue was. It didn't work out. She left. What are you asking her to do? Stay on in an untenable situation? News flash for you: when you make a mistake signing on with a company, you aren't "honor-bound" to stay there until the situation plays itself out. If your si…

Just smells wrong, to take $6,900/mo + 6% (and agree to it) then for no reason demand more equity (which can't pay your bills) so basically the only reason to demand more equity is selfish-ness and you realize the founder is in a bad spot.

- She only left cause they were out of money, I suspect she would have rode that horse to death.

-I'm done debating; it was really fun, I got work to do; Im sure you do too... .rb

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

#52

Post by [deleted] »

omfut wrote: post #18

That’s a hard spot to be in. I can hear your pain on how you want you idea to be launched. Honestly, learning django is no brainer. Django guys have done an amazing job building the framework. On a side note, why is your prototype taking that long? In today’s world, you can build complex apps faster than you can think off. Here is some links that can be handy for your django learning. All the best! This is a excellen…

[deleted]

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

#53

Post by tptacek »

tomh wrote: post #32
tptacek wrote: post #22

Earlier quoted context omitted.

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

Yeah, but now all the technical knowledge of the project has walked out the door with her. Its a classic 'single point of failure' scenario.

That was a huge management error. A significant capital investment went into development. But it doesn't sound like any effort was put into consolidating the gains they made throughout the year she worked there.

Again: the project could have been broken into milestones, maybe with each demo-able. The founder wasn't technically capable of doing this, but could have had the dev write up a spec milestone-by-milestone, and then managed the project to that spec. At any point during the year, the dev could have left and the founder would have had something usable to work with.

Not only that, but by not managing the project well, the founder sent a message to the dev: "I don't really know what I'm doing, so I'm throwing money at you to make things work". There's nothing wrong with that when the person you're throwing money at is a full partner whose interests are aligned with yours. This person wasn't.

I'm making a lot of assumptions here, and I apologize if I'm off the mark.

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

#54

Post by allenbrunson »

tptacek wrote: post #46
tptacek wrote: post #28

Earlier quoted context omitted.

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.

No, really, there are. =)

i assume you made this comment because somebody downmodded you for no real reason? that seems to be happening a lot in the last few days. i'm seeing lots of comments at zero points that didn't deserve it, so i bump them back up to one.

i think we've got a silent karma troll.

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

#55

Post by tptacek »

allenbrunson wrote: post #54
tptacek wrote: post #46

Earlier quoted context omitted.

No, really, there are. =)

i assume you made this comment because somebody downmodded you for no real reason? that seems to be happening a lot in the last few days. i'm seeing lots of comments at zero points that didn't deserve it, so i bump them back up to one. i think we've got a silent karma troll.

Sorry, I just thought it was amusing. I don't really care. To make this thread slightly more productive, I will recommend one such consultancy: Blue Flavor.

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

#56

Post by bigtoga »

drinko wrote: post #14
dangoldin wrote: post #4

There may be some legal action you could take - did you sign a contract with the developer? It won't solve your problem but it may get you some money back so you can divert it to some other development. At the moment, I think you need to get an opinion from a real developer who can look at the code and the project design to see how long it would take to get it to the prototype stage. Depending on that I would try to…

no project contract was signed - I was naive and had met her through a mutual friend, so I thought I could trust her and we could save some money. There is a contract for the company set and equity structure.

Then write up a legal agreement that says she must be with the company for "x" years to earn the equity. Add in a little extra incentives for signing it ("Dual monitors!"). Once she signs it, fire her.

Regarding legal costs, I've used Pre-Paid Legal's Small Business Plan for a year. It costs $69/month and they do all sorts of stuff (and things like contract review are free). It isn't perfect but it has saved me the hassle of, "Should I sign this? Should I do it like this?" since I no longer have to worry about money when it comes to important legal decisions. URL: http://wserver0.prepaidlegal.com/legalzoom/SBpage2b.html

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

#57

Post by bigtoga »

sanswork wrote: post #15

I'm not sure I can give any advice to help your situation specifically but I can say some stuff that might help other non-technically people in the future. Make sure you have milestones setup in your development process. If she said it would take 6 months then make sure at 4 months your developer is at a reasonable place, hell make sure at 2 months that they are, if they aren't then it's time to reconsider the contra…

Listen to this person.

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

#58

Post by drinko »

tptacek wrote: post #42
aonic wrote: post #35

Earlier quoted context omitted.

If you are a paying your developer a market value salary, you are basically paying to have your idea developed. Unless you were paying the developer very little, or nothing, that is when equity should be used as payment 35% is a LOT with $6900/m

What was the nurse doing? Ideas aren't worth 65% of the company alone. I don't know if it's intentional but it seems like a lot of people here are talking as if there were "rules", like "x% is fair, y% is unreasonable". There are rules of thumb. But compensation is a marketplace. If the founder has no leverage, taking a lower stake in exchange for salary isn't honorable. It's just stupid. Both parties need to feel li…

I raised the funding, performed the market research, liased with many different health organisations, classifed the information in the database, wrote all the copy for the app, and created the interface mockups working with a designer.

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

#59

Post by mixmax »

pg wrote: post #36

I realize this won't sound encouraging, but it seems to me that you were doomed from the start. Whoever writes the code in a web startup has to be a full cofounder-- which means a friend, not just a stranger you recruited for this project. You've inadvertantly shown why this custom exists. Trying to outsource the development would just be repeating the same mistake. Your best bets would be either to learn to hack, or…

I can counter that with a real world example. I've done a startup that succeeded and got a pretty neat product out (which btw. included FPGA programming, hardware, mobile technology, and web technology - not exactly easy stuff..) and we had contractors do everything. No hackers aboard. And it worked.

So it can be done.

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

#60

Post by aston »

drinko wrote: post #31
tptacek wrote: post #20

It sounds to me like this is a set of circumstances where the developer had most of the leverage, you failed to recognize it, and got burned. Lots of businesspeople manage low-equity (or no-equity) employees. Their business isn't jeopardized when one of them threatens to quit. Some of them are savvy enough to know how to keep projects small and focused and checkpointable, so they're never more than a milestone into t…

"this is a set of circumstances where the developer had most of the leverage, you failed to recognize it and got burned" This is true to a degree. We agreed to the initial arrangement as a fair deal, but I didn't appreciate the way she swtiched terms on me, and then bailed when the going got tough. (ie funding ran out)

Doesn't speak well to her commitment to the company, but she probably was right about being owed more equity in the company, if only because her leaving really has taken out a good chunk of the value of the enterprise.
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