1. Assign all stocks to all founders at creation, this is a no brainer. All companies have owners.
   1. You can have a contract for future changes or vested stocks to allow changes even with a potentially unfriendly founder in the future
2. You’ll emits new stocks when you have investors, that’s how dilution works, you don’t sell your current shares. The money goes to the company, not your pocket like when selling shares.
3. I’m not in the US can’t help you with that
4. The company can accept paiments from the incorporation

Question 1 and 4, indicate that you might need to really ask for help of an accountant or CPA.

55/45 split

Any reason why you two don’t have the same equity ?

Inequalities in equity can go a long way, it’s commonly knowledge that unequal equities among founders can create resentment as time goes on and involvement changes.

Unequal equities are usually decided before getting serious when commitment is scarce, at that point sometimes the most active one can get more equity in the first 3-6 months.

However companies can take 4-5 years to takeoff, working you ass of for years and years can and will likely change the power structure among the founders. Unequal equity will then demotivate key founders as they’d feel robbed.

“It’s not really my project, I just need to get this done and after this one I’ll make my own company” is the root of all problems

Equal equities even if not ideal doesn’t create the same amount of resentement. For just 10% difference between you two, I’d suggest to avoid planting that seed for problems.

Humility really helps in the long run, it opens many doors while pride usually closes doors.

Small doors for sure, but continuously becoming a bigger thing as time goes on. The humble value those doors, the prideful diregards them.

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Also this is plain clear promotion --> rule 2. is explicitely violated by this post

Roadblocks are the requirements for something to be worth money, if there wasn’t constant roadblocks then there won’t be much inside the tunnel because it’d have been plundered long ago.

Doesn’t mean the tunnel isn’t just filled with soil and nothing else but an inexplored hostile land is likely to hold retrievable treasures than a fully explored habitable one [where obtaining a treasure requires you to be a noble of high birth].

Depends, a single focused team can usually achieve much higher things than two team both trying to achieve success on their own.

Partnerships, Large deals, Marketing, CRO, SEO, Content, Branding, Buzz are example of topics where success is obtained through mostly trial and errors + luck and compounds overtime.

Product, Sales process, Customer journey also compounds, doubling your efforts start paying up quite fast.

The compounding effect might the sole reason why merging two team in the very long run might be the ideal solution.

Equity means decision making

If no-one has equity then you have it all making you the only member of the company board.

If you have all the final words as it’s your business, then no one is your co-founder, they are all employees.

It’s really important to decide who gets voting rights and how much. Not for good times but when disagreements appears when there are two diverging opinions who gets to vote. If you decide to sell or stop [eg. you die or a personal disaster with wife+kids dying in a crash], people with equity are protected legally, you can’t just remove their livelyhood because you decided so even if you had unforseen disasters.

Once you settled the voting rights you have a new problem, fresh companies often run with negative cashflow and unpaid work for extended periods of time.

Meaning that initial members of your team will invest personal money and unpaid work into the business, you’ll need a way to accomodate for that because if you put 10-50k€ into a business and work it from the ground up, you won’t be happy that a newcomer slacker gets exactly the same as you and a salary from day 1.

If early members aren’t advantaged then most people will wait until it “starts having traction” before joining your project. You’ll be alone for years and newcomers at that point will just be employees, you won’t have any actual co-founders, you might call them that, they might call themselves that, but they won’t be.

These don’t refer to a particular structure but issues that you might naively do if you don’t account for actual reasons why equity are important in a business not matter the business model.

Is this some kind of joke or just delusion ?

Good luck, you’re going to seriously need it

LOL

Lmao, this is some high quality shitpost

GPT4 is significantly more potent that the 3.5, 3 can’t write heavy complex code for me and work with multiple files without making mistakes. I’m not talking about example codes, I’m talking about giving it actual working code and requesting new things to be added.

Naaahh, even experienced coders are usually shit at building an product from scratch.

By the time you can hold your weight, it’s already too late.

Play your strengh, time is the most critical asset of a company you can’t waste it learning a skill that is impossible learn from zero to master in a 2 years.

It’s always nice to understand things because it makes discussions sooo much easier but you don’t need to code.

Anyway after a year with your cofounder don’t worry, you’ll understand a lot about code and requirements because your tech founder will be annoying you constantly about that:

This works like this [proceeds to monologue for 30 minutes], We can’t do this, we can’t do that, we’d rather do it like this, we’d rather do it like that, this is easy, this is hard, this is easy, this is expensive, technical debt …

“Off course I know him, he’s me”

I’d only buy into it if YOU are en entrepreneur that makes at least 10x my yearly revenue

Around 1x if you already made exits or your businesses are much sexier than mine. (arbitrary)

I’m currently at 5M-10M$ yearly so I’m not very eager to pay to see things from people less successful than me obviously.

I’m definitely not a successful guy and definetly not “there” yet. So it has value what you are trying to offer.

But are YOU the guy that can offer it ?

Wantrepreneurs will most likely like your idea so there might be a huge audience over there.

Started coding before selling

I was coding all day long before I even had my first customer, rookie mistake

To start yes

To make it successful no

You’re going to lose wayyyy more than 4-5% if you stop accepting credit cards and paypal, way more. I can’t stress how much your conversions will drop, I just can’t stress it enough.

You’re better off putting your offers at 5.99$ and 10.99$ than doing what you are suggesting.

ps: Are you really proposing ACH as a main online paiment method ?

You have two cases:

1. Investing
2. Acquihire

In case of investing, you leave your job and work for your company until it works or bankrupt, in other words you go “all in”

In case of acqui-hire which is the more likely scenario you are facing this is the standard situation:

1. Acquiring company is looking for exceptional talents that are able to build the products they want to build internal
2. They look for startups with good products in their same industry, the focus will usually be around the technology and know-how it’ll never be about your business as they don’t care at all.
3. You’ll get a good valuation but usually goes between 100k$ to 1M$ per founder. Ebida will skew that to higher values but they won’t go acquihiring high revenue companies, it just won’t make sense.
4. They’ll propose to buy the company and have you working part time in the “parent” company and part time in your “startup” but you are going to be hired by the parent company.
   1. They might even to tell you that you’ll go fulltime in the parent company and they’ll find a replacement for you in the startup branch
5. A earnout
   1. Minimum duration you are commited to work for a given salary and can’t resign
   2. They’ll try to get a earnout as long as possible, it’s limited by law to 5 year iirc, but usually 2-3 years.
   3. The salary for your earnout duration is where you have the leeway to ask because this whlole thing is to hire you guys, you can ask way more than standard employees.
   4. You should go for 1.5-2x the monthly price of a senior in your industry, target the salaries of very high level managers, for a dev in belgium is 8k€-10k€ for a senior, in BE you should aim for at least 15k€ in earnout salary
6. The sale of your company might be of the form that they pay in 3 times 1M$, where the first paiment is given at 333k$ and the 2 remaining will depend on the performance on the company after purchase, so it’ll usually be 500k-700k$ total
   1. you have very little leverage in here as your company without you is worth almost nothing, so this is just the money they have to “pre-pay” in order to hire you.
   2. EBIDA should be added with a reasonable multiple: x3-x20 depending on your industy, salaries for typical people of your profiles should be subtracted from ebida which usually makes this metric useless for startups
   3. Product technology, you can valuation the technoloy by the number of Man Months (time x people x correcting_factor[<1] ) x Monthly Cost of Man, this will give you a rought estimate of how much your current tech stack/product is worth on its own without your customers>
   4. if you have employees of high value, you can also levarge them but usually for a small premium in the valuation so don’t bother with it if it’s an acqui-hire
7. Next after the sale, your product is going to be 99% scrapper or put on the side, it was never the objective to make it grow, it was to get you guys onboard the parent company.
   1. This is sometimes painful for founders that invested 4-5 years into a product they loved and watch it die in a year progressively.

Overall your two main leverages will be:

1. Duration of earnout
2. Commitment level to parent company

The discussion is always in multiple steps, where they might misguide into wrong directions to steer down your confidence:

1. Pretend they want to take majority stake in your company because they only take 51%+
2. Radio silence when you start discussing
3. Start the discussion with things different and proposing a loan format instead of investment
4. You go on and present your number tech and the overall company especially the people behind it
5. The make a stupid offer where you get 20k€/month each as salary for the parent company and scrap your side business
   1. You can already accept here and forget about your startup if you really are interested
6. Radio silence as you want them to buy-in
7. They comeback with an offer for 100% now, and this time it’s what I described in the standard situation

I hope this explanation will help you navigate through your opportunities

ps: This is likely my longuest reddit comment ever

Damn your website is sliiick.

Good job on the journey already.

From what I’m seeing from you, you are on your way to achieve great things.

Fire them all, bad attitude is a real sign of incompetence.

Bad attitude is an illness that will never stop until everything is reduced to ashes.

Cut the infected flesh before the whole body succumb.

You don’t have big customers yet, you’ll manage on your own until you can get high quality employees onboard

When investor money comes in their money becomes at risk instead of founders’ in order to maximize likelyhood of success.

Now you can leave your job and be 20% less in the startup. Until either the startup will bankrupt or suceeds. It’s no longer your money at risk.

If you don’t want growth, you can just continue like this, but chances are you’ll run it to the ground being overworked.

BTW this looks like an acqui-hire where the “investor” is actually hiring the founding team rather than interested in your company or offering.

It doesn’t need to be a P, it can just be a MV offering. By removing the product part you can even start leaner and learn your way there.

Adding the product component can add months of build time for a subpar offering. If you ask the question on this sub then it’s probably one of your first rodeo, you need a fast develiery cycle.