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

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

#31

Post by drinko » Wed, May 07, 2008, 6:06 PM UTC

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)

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

#32

Post by tomh » Wed, May 07, 2008, 6:06 PM UTC

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.

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.

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

#33

Post by run4yourlives » Wed, May 07, 2008, 6:06 PM UTC

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.

She's taking a full salary, which by itself negatively affects the startup's chances for success.

She's not taking enough risk to get anything close to 35% in my opinion. It doesn't get more sweetheart that that. Too bad she was too dumb to realize that her good position could have been very good later on.

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

#34

Post by drinko » Wed, May 07, 2008, 6:07 PM UTC

tptacek wrote: post #30

drinko wrote: post #23

Earlier quoted context omitted.

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.

Well, my monthly outgoing are $2000 a month, so it kinda feels garagelike to me.

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

#35

Post by aonic » Wed, May 07, 2008, 6:08 PM UTC

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.

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

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

#36

Post by pg » Wed, May 07, 2008, 6:09 PM UTC

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 find a cofounder who can among your friends.

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

#37

Post by mixmax » Wed, May 07, 2008, 6:09 PM UTC

I've been in pretty much the same situation - being the guy with the idea, not knowing how to code it and having problems finding developers that were both talented, got things done and were willing to stick through the hard times. My solution was simply to learn to code (PHP in my case) and it has been one of the best decisions I've ever made. I think you should do the same. It's not all that hard, and there's plenty of help to get if you ask google.

And by the way, it is obvious from your post that you're dedicated and really want this to succeed - that is the one most important ingredient in success. I think you have a good chance,

Good luck.

Feel free to e-mail me if you have any questions, my mail is in my profile.

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

#38

Post by awt » Wed, May 07, 2008, 6:10 PM UTC

bapbap wrote: post #12

I was in the process of writing a long post but here it is in a few points: Ditch her. You don't need her and her screwy demands. That's pretty decent pay, I wouldn't have given her any equity. Do what you can to part ways as soon as you can. Find another developer, on a contract no equity basis, if you can afford it somehow. If you can't you'll need to offer equity. Learning Python from scratch is an option but not…

I worked as a rails developer for less equity and less pay in Silicon Valley for almost a year -- I thought it was a pretty fair deal too.

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

#39

Post by tptacek » Wed, May 07, 2008, 6:10 PM UTC

redorb wrote: post #29

tptacek wrote: post #22

Earlier quoted context omitted.

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.

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 situation sucks, leave. She did.

There's another unfortunate lesson here. When people threaten to quit, counteroffers are often a waste of time. People with MBAs will tell you not to make them at all. I've learned this the hard way; I got a really good offer in the middle of my last PM job, brought it up with my current company, and they upped my stake. But for the next 2 years, they were constantly on the defensive assuming I was going to quit again; it damaged the working relationship severely.

If you're a solid company, and someone gives you an ultimatum, a no-foul clean break is often going to be the right move. I wish it wasn't like that (I had no intention of quitting), but some political situations are untenable.

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

#40

Post by tomh » Wed, May 07, 2008, 6:11 PM UTC

tptacek wrote: post #26

tomh wrote: post #21

Earlier quoted context omitted.

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?

Not only that, but the market it's based in - our poster's app happens to be in healthcare, which has its own 800-lb gorillas (large hospitals and pharmas) and its own smaller players too.

Obviously the poster thought that the app would become lucrative enough to justify a $160k investment. If the payoff looked really huge, you could justify being a little more stingy with the options. Just sayin'. (From the guy who doesn't have a lot of options because his app is in healthcare too)