271–280 of 293 posts
Don't understand why everyone is talking lawyers. I'm sure that you have an equity stake which value will be helped by this new CTO. If you have no equity and (as you say) are a founder, then you are out-of-luck and no legal magic can solve this. Move on and leave on good terms. You never know.
You need to hire an attorney, one who works in business litigation (if you can find someone specializing in minority shareholder disputes, that much the better). Right now. If you're delaying on this point out of some idea of wanting to "try to fix things first" or "not wanting to be the bad guy," you're just shooting yourself in the foot and downing blood thinners to keep the wound from clotting. Working with an att…
It's interesting that when it involves a founder we're suddenly no longer considering the obvious scenario that the author is one of the many coders who is simply not good enough and has to go. And the author himself has already admitted his limited competence. It's perfectly reasonably for the CTO to ask him to leave as a coder . In fact, setting those standards and making those decisions is what you hire a CTO for.…
Sure, Pay up the fair compensation. Then he can have a clean exit.
You need to hire an attorney, one who works in business litigation (if you can find someone specializing in minority shareholder disputes, that much the better). Right now. If you're delaying on this point out of some idea of wanting to "try to fix things first" or "not wanting to be the bad guy," you're just shooting yourself in the foot and downing blood thinners to keep the wound from clotting. Working with an att…
It's interesting that when it involves a founder we're suddenly no longer considering the obvious scenario that the author is one of the many coders who is simply not good enough and has to go. And the author himself has already admitted his limited competence. It's perfectly reasonably for the CTO to ask him to leave as a coder . In fact, setting those standards and making those decisions is what you hire a CTO for.…
No sane startup would ever get rid of a technical cofounder who knows the stack and can be motivated by his ownership stake to keep the servers running in a worst case scenario. So it really sounds like the CEO is incompetent and doesn't realize he needs to preserve his ability to remain independent in order to have leverage with investors.
You say that you are currently desperately needed now, so your leverage to work-out an equitable legal arrangement with them will never be greater than now. As you said, in 6 months you may not have any leverage.
Just my $0.02.
Earlier quoted context omitted.
Continental European countries usually work that way. When Germans say "die sprechen nur noch über ihre Anwälte" (translation: they used to have a good relationship but now they only speak through their lawyers to each other), it means that the trust between two parties is broken beyond repair. Generally, by unilaterally involving a lawyer, you signal that there is no hope left to settle disputes on a basis of trust…
Eh, no, also in Germany it's perfectly normal to have a lawyer consulting on business matters with potential big impacts.
What I find disgusting is the culture of hiring a lawyer to put as many traps as possible into a contract, which forces the other party to hire another lawyer to remove the traps again. This does not make anyone better off except for the lawyers.
Healthy and lasting business relationships are built on trust. The relationship between McDonald's and Coca-Cola is based on a simple hand-shake. If you want to preserve such a relationship and it comes to a disagreement, the first thing you should do is talking to each other. Once that fails, you can consult the lawyer - which will formalize everything and slow the process down (e.g. "I cannot disuss this today because I have to check with my lawyer first"). And being slow is one of the things one should avoid when being in a startup.
Earlier quoted context omitted.
You are suggesting that the lawyer can help in two ways: 1. Negotiations 2. Understanding the legal situation Regarding the second point, the correct advice is not to sign contracts whose consequences you do not understand. Regarding the first point, engaging a lawyer will destroy whatever trust and mutual understanding is left in the relationship between the founders. This might be the US way of doing things. But be…
Offending the people trying to screw you out of your earned rights and compensation should not be at the top of your list of things to avoid.
You founded the company,doesnt matter how bad you are at coding there is more to running a company than coding skills. I'd fire the CTO,no matter how good he is,you're the boss,he is merely an adviser,he shouldnt be talking to you like that. What matters in business is loyalty, not skills.You'll learn it soon enough.
Another poster said exactly the right thing. Contracts, agreements, documentation, MOU, etc are the things that matter. Case in point: I am leaving company after being acquired. It's a mutual decision so both sides are happy, but we are negotiating an agreement right now to release me so I am free to pursue concepts (repeat: concepts not IP) that I pitched the CEO 2 years ago. They are only ideas but it still needs to be in writing since I don't want them coming back some years down the line. It's all about contracts.
You founded the company,doesnt matter how bad you are at coding there is more to running a company than coding skills. I'd fire the CTO,no matter how good he is,you're the boss,he is merely an adviser,he shouldnt be talking to you like that. What matters in business is loyalty, not skills.You'll learn it soon enough.
What matters in business is loyalty, not skills. And what matters even more than loyalty, in this kind of game? Contracts. If this is getting ugly, and the company has a product/service that could take off and be worth serious money, your only friend is your lawyer, and your primary assets should words with some signatures underneath. And if, heaven forbid, we're talking about a cofounder who doesn't have a rock soli…
It's an interesting point, how should founder sweat equity versus founder capital contribution vest? And then of course there's investor equity...
Can cash from a VC be treated differently from cash from an employee/founder? Of course it can, you have different shares, with different terms, and a different value per share.
In the end, whatever terms you negotiate for your shares should be used to value those shares. 3 year vesting, for example, sounds like a valuable feature for the company, so you would expect those shares to sell for [much] less than fully vested shares.
So the point is, you should definitely ask for accelerated vesting, and I think it's customary to do this at least for a portion of share to at least cover the cash and the months worked.
The realist part of me says, either you can fix the working relationship and contribute good value, and have a good enough time doing it, or you can't. If you can't, the best thing you can do for your company may possibly be to step aside. By all means fight to change their minds, and find the RIGHT solution for all of you.
In any case, you should be happy to continue to hold some portion of shares. If they want them to be non-voting, that's just another way to decrease their value, so you should ask for a commensurate increase in share count.
TL;DR; There's nothing wrong with a vesting schedule. It's an interesting point, how should founder sweat equity versus founder capital contribution vest? And then of course there's investor equity... Can cash from a VC be treated differently from cash from an employee/founder? Of course it can, you have different shares, with different terms, and a different value per share. In the end, whatever terms you negotiate…
Which can also be thought of as, how much share has been earned before you leave, and how much additional may be earned even after you leave?
So another option to consider is to step aside functionality, but remain as an employee so that options continue to vest, and get proportional employee benefits. This moderates some of the financial impacts (like being force to pay for your shares right then, and losing possible employee benefits) for some period of time.
I didn't get a really clear view of how many employees the company has, to understand where on the growth curve you guys are running? But another way to think of this is you are a highly motivated employee, who was smart enough to get this thing started and truly committed to the cause. So who in their right mind would turn away an employee like that?! From what you've told us, I think the CEO and CTO are idiots if they can't figure out a productive way to work with you.