Hi guys,
I haven't been on here a whole lot due to business starting to pick up and free time dwindling. I wanted to share something from my experience over the last year and a half with a "bad apple" partner and potentially some ways to avoid making the same mistake as mine.
Long story short, I partnered with a friend to build a product. We have the product built, launched, and in a fully functional capacity. We initially decided without any guidance, legal advice, or input from others to split equity 51/49, with me as the majority. May my partner ran out of money and got a full time job. The company has since taken a very slow progression technically, but again we have a functional product. Partner was dead set on staying at that equity and we had a mentor from a local incubator have a video conference to give some guidance. Partner didn't turn on his camera and refused the video portion. Red flag number 143. After some time away my partner comes back with "Mentor is right, you're driving the company not me. I'm good with 10-15% equity, and just want to see this company succeed. Do whatever you need to and I have your back as much as I can with my job." He essentially changed himself from Co-founder to technical adviser or just "guy who developed the product."
Well hell. That's a great way to end that conversation. After about 2 months of constant anxiety this has finally come to an amicable end. Time to get back to work now that I can sleep and think straight.
What did I take from this? Partners can be terrible to have to deal with. Making large decisions like equity, vesting, product support, product ownership, is all very volatile without proper guidance. Co-founder issues are the top reason along with running out of money to cause a business at this stage to fail. I came out on top and the business is moving forward wonderfully. Before getting partners or "teams" together make sure you have people in place to protect yourself and your product/ideas.
Mike
I haven't been on here a whole lot due to business starting to pick up and free time dwindling. I wanted to share something from my experience over the last year and a half with a "bad apple" partner and potentially some ways to avoid making the same mistake as mine.
Long story short, I partnered with a friend to build a product. We have the product built, launched, and in a fully functional capacity. We initially decided without any guidance, legal advice, or input from others to split equity 51/49, with me as the majority. May my partner ran out of money and got a full time job. The company has since taken a very slow progression technically, but again we have a functional product. Partner was dead set on staying at that equity and we had a mentor from a local incubator have a video conference to give some guidance. Partner didn't turn on his camera and refused the video portion. Red flag number 143. After some time away my partner comes back with "Mentor is right, you're driving the company not me. I'm good with 10-15% equity, and just want to see this company succeed. Do whatever you need to and I have your back as much as I can with my job." He essentially changed himself from Co-founder to technical adviser or just "guy who developed the product."
Well hell. That's a great way to end that conversation. After about 2 months of constant anxiety this has finally come to an amicable end. Time to get back to work now that I can sleep and think straight.
What did I take from this? Partners can be terrible to have to deal with. Making large decisions like equity, vesting, product support, product ownership, is all very volatile without proper guidance. Co-founder issues are the top reason along with running out of money to cause a business at this stage to fail. I came out on top and the business is moving forward wonderfully. Before getting partners or "teams" together make sure you have people in place to protect yourself and your product/ideas.
Mike
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