When the company is not formed yet and is still an idea in an entrepreneur’s mind, looking for partners with various skill sets and experiences, what kind of legal risk or personal liability does one face acting in such a manner where they are looking for partners and talking to professionals?
How would you go about promising let’s say 5% equity in the company when it’s formed and bonuses on successful milestones without making yourself personally and financially liable in case the whole idea doesn’t work and we end up not forming the company and not pursuing the idea?
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Convertible note. Guarantee the money via a loan where the investor decides after one year whether is a loan or investment. Keeps you from needing to update the investor at every whim and also eases.
Just don’t promise anything not contingent on certain progress. That should be basic common sense, right?
Validate your idea first. You can do many things before partnering.
I feel bad for anyone who partners with you
Not OP but curious why you say that! For me it’s the overly wordy sentences - makes me confused and I haven’t figured out what they’re asking.
Well cuz 1 this person is obviously very inexperienced so their thing is not gonna work.
They have zero company, only an “idea” and are talking about 5% lol. I’ve been here and been led on early in my career by exactly this type of person. OP: you don’t need cofounders. Just make your thing with people on Upwork, fail and then try something else.
Y’all don’t need cofounders. You need to talk to potential customers and see what they buy. Or just buy a business. That’s a lot easier than spending 18 months on a product no one wants.
And op no one worth their salt is gonna want a measly 5% for your “idea” that probably already exist and you’re gonna sabotage anyway even if you try. Can you tell I have trauma from this stuff Lmao?
I agree this sounds like a showpreneur putting into effect what they read online
I mean at least they’re asking questions right? Better to ask and learn than find out the hard way.
It’s not the right questions tho. The questions should be: what do you guys things of my prototype? What do you guys think of this cold email copy I’ve been sending? Or how about my MVP is done, should I try some search ads? They are asking mental masturbatory crap cuz they are like 99% of people with an “iDeA bRo 🤪”. Never gonna launch anything, will never have customers, will simply waste thousands and hopefully not some young devs time with their very generous FIVE percent equity stake in their “idea” lol clown
He could be like 14yo. Gotta learn what’s stupid at some point 🤷🏾♂️ People with no experience always want to retain 100% of their company with no money and do no work at first lol.
Almost every day there’s someone here asking if they should get an NDA to protect an idea and gets told no one wants their shitty idea. Especially not someone willing to put their money on the line. It only get annoying to me when they don’t want to take the advice because they think it’s the worlds greatest idea.
You don’t have a company yet or product or investment or users. You just have an idea that hasn’t even been validated.
You should talk to a lawyer in your jurisdiction and perhaps read some books so you understand the general lay of the land. The level of generality at which you’re asking this question makes it difficult to give a concrete answer, and if you’re worried about liability and how to paper your arrangements with investors, you should be speaking to a lawyer (consider looking for an entrepreneurship law clinic if you can’t afford to pay an attorney at this stage).