FOUNDER MELTDOWNAVOIDING
10 TOPICS TO DISCUSS FIRST
https://www.flickr.com/photos/blacktanso/
START-UP PRE-NUPTIALS
Fighting with your co-founders sucks
Yet founder meltdowns are incredibly common in the start-up
scene
Heck! Facebook’s founder squabble was so bad it become a feature-length move called The
Social Network!
They typically happen about 2 or 3 years in
when somebody starts thinking that somebody else is not putting in
their fair share of sweat
or that the strategy is just wrong
or life priorities are pulling you apart
or when the thrill is just gone
Whatever the case, it is almost always emotional, irrational, and
painful
That’s why you should always prepare a “prenup” for the worst,
when things are the best
All founder teams should have a heart-to-heart and produce a signed
founders contract at the outset of any venture
Here are 10 things that you should discuss and agree upon before
signing
0 1
SHAREHOLDING
How will we divvy up equity, assign vesting rights, and why? Be quantitative here. It needs to make sense. Don’t just split it equally among friends. You are acting on behalf of the firm’s best interest here.
0 2
TIME AND PRIORITIES
How much time will each of us explicitly commit to during years 1, 2, & 3?
What are known, acceptable other priorities (and how will we agree to schedule them)?
0 3
DELIVERABLES
What are our shared goals for the company?
What are each of our SMART milestones and deliverables (as defined in a job description)? What if one of us does not deliver?
0 4
LOANS & CASH INJECTION
How much $ will each of us put in?
What if we need a cash injection from founders mid-stream? Who pays what, how will we determine valuation, and what happens if one of us can’t pay?
0 5
SALARY
How much will everyone be paid? What happens if we need to adjust up or down?
0 6
RETIREMENT
What if one of us has an accident, wants to leave or relocate? Needs to take another job to survive? What if that other job is competitive? What if it turns out that we hate each other?
What is expected in terms of leaving? How do we deal with shareholder loans & shares?
0 7
TIE BRAKING
What if we disagree on strategy or tactics? How do we make a final decision?
0 8
REALITY CHECK
What are each of our known strengths and weaknesses? What are we each not prepared to do?
0 9
EXITS
What type of exits are we OK with? How will we deal with the sale of shares (see standard shareholder agreement terms like tag-alongs, drag-alongs, right of first refusal, etc)?
10 WORST-CASES SCENARIOS
What is the process for dealing with a breach of these agreements?
good luck
be honest
be respectful
listen to each other
But know that if you cannot candidly discuss these
hypotheticals and agree upon resolutions when things are good,
then something smells fishy!
SHARE THIS DECK & FOLLOW ME(please-oh-please-oh-please-oh-please)
Selena Sol asks…..
http://www.slideshare.net/selenasol/presentations
stay up to date with my future slideshare posts
[email protected]://www.linkedin.com/pub/eric-tachibana/0/33/b53
CLICK HERE FOR MORE!!!!