I am a technical cofounder where I have a decent amount of equity but not a ton. We have 3 products. 2 are released and are profitable and the third is in pilot. Overall the company is profitable but growth has been slow. All 3 products are in the same industry.
I have various side projects that I work on the side that are for different industries. These are all in the idea or planning phase but I have fairly detailed business plans, product requirement docs, and mockups I’ve put together over the years.
One of our super large customers wants one of my side projects which means I could potentially start a new company with a 1 million dollar contract out the gate.
What’s the play here? Start a new company? A product in my current company? Subsidiary? Is there a way to get more equity out of this or am I being greedy?
Thanks in advance for the feedback!
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Based off of what I read, I like the idea of staying with your current company. There is safety, but still strong incentive. You also avoid the massive risks and detailed planning associated with starting your own company.
I would definitely have a conversation with your partners about this and present them with your idea and why you deserve a higher share because of it.
I have another compeltet different suggestion from the ones mentioned above, which is something I’ve seen many wealthy people do. Why don’t you create another company, but 1-2 people to actually run it? With a 1M out of the gate, that shouldn’t be a problem.
You can (should, even) also directly co-found this company and find people who are eager to take the project. You wouldn’t have 100% equity of the second of course, but as others said, you can’t stretch yourself too thin. In this scenario you basically act as an investor for another company.
There are several aspects here that need to consider. First, should check the legal aspect. Can you have a company in paralel? Sound like its related for what your company does then it can be an issue. The focus aspect - do you believe you can run a company aside? Its very important to be focused especialy in startups. What is your added value? If its only the idea, and from there anyone with some general knowledge on the domain can continue then it will be much complicated for you and the main option I see with big value for you is opening a new company and you act as investor and a little more. But if you have a lot of value and will need your expertiese and consultation, in that case you will be able to start a company with cofounders that will need you and you will need them and for the other options, you will have levarage inside your company to get more shares (in the first case they can get your odea and apply it but in the second case they realy need you). For last its more about your personality, some are fit more to be founders and some are more to work in companies as employees, they are both ok but depend on your personal preferences. I hope it helped.