Re:How much of my company should I give away?
by dawie on Monday April 02, 2007 @02:41PM
(#8276)
I have a startup (A) that is about to launch a product. I am the only founder. I have 2 friends that have a brilliant idea for a startup (B) and they are going to start working on it soon. They think my startup is an ok idea. They want 20% each of my startup (A) [I have to give up 40%] and they will give me 20% of their new startup(B)
Re:How much of my company should I give away?
by mgandhi on Monday April 02, 2007 @07:15PM
(#8356)
Could you monetize these ideas? How much would they make you?
Also, how do you see these shares? As a commitement? How much of your time would you spend on each? They had the idea so they deserve a premium but if you will spend just as much time as them on it, that premium is all that separates you from them.
Commitement matters. As important as ideas are, without commitement and execution, they are nothing.
Re:How much of my company should I give away?
by dawie on Monday April 02, 2007 @09:05PM
(#8385)
Its commitment and Cash. We are going to fund ourself. Its a brilliant idea. Its simple and it applies to a long tail economy. I believe its a multi million dollar idea that needs to be executed well. Also I think that my idea can be a platform for theirs... Everyone will win from working together. I just think that giving up 40% of a nearly finished product is big.
Re:How much of my company should I give away?
by zaidf on Monday April 02, 2007 @03:01PM
(#8281)
Honestly I don't think anyone can give you good advice not knowing much about startup A and B.
In most innocent sense it doesn't make sense why you would give up 40% for their 20%. Not that this means much without knowing any detail about what level each startup is in.
Ask yourself if their company is worth twice yours right now. You would know better.
Re:How much of my company should I give away?
by dawie on Monday April 02, 2007 @03:04PM
(#8284)
I am going to have to give up some. I think their idea is a brillaint one. Also I really need some co-founders. I have been going at it by myself and we all know what PG things of that...
Re:How much of my company should I give away?
by zaidf on Monday April 02, 2007 @09:10PM
(#8387)
From what you describe, it would be better if you guys do a merger instead of run two different companies.
Do a merger and figure out the split based on what each of your cofounder brings to the table. This makes more sense if your business and theirs compliment each other and are both in the startup phase.
Right now I sense that you are confused about what exactly you want out of this. If you are looking for a cofounder, a merger makes much more sense than equity swap which doesn't get you a cofounder.
Is this a fair deal?
Also, how do you see these shares? As a commitement? How much of your time would you spend on each? They had the idea so they deserve a premium but if you will spend just as much time as them on it, that premium is all that separates you from them.
Commitement matters. As important as ideas are, without commitement and execution, they are nothing.
In most innocent sense it doesn't make sense why you would give up 40% for their 20%. Not that this means much without knowing any detail about what level each startup is in.
Ask yourself if their company is worth twice yours right now. You would know better.
Do a merger and figure out the split based on what each of your cofounder brings to the table. This makes more sense if your business and theirs compliment each other and are both in the startup phase.
Right now I sense that you are confused about what exactly you want out of this. If you are looking for a cofounder, a merger makes much more sense than equity swap which doesn't get you a cofounder.