Are Full-Stack Developers in the NYC area interested in becoming a Cofounder/CTO for only equity?

January 12th, 2016

For start-up companies, it has become increasingly difficult to acquire high quality programming talent while being cost efficient.

Would a full-stack developer consider receiving a large stake via equity and a cofounder position in the company in exchange for foregoing salary during the early stages of product development?

Adam Arthur Atom Creative Corp, DevShare and infoATM

January 12th, 2016

As a architect level software engineer and entrepreneur, the answer is "potentially" -- but it is rare. First, you should know that talented software developers like myself are CONSTANTLY approached by people who want us to build their product "for free" (in our eyes). Many have families and obligations, and aren't in a financial position to take that kind of a risk. Additionally, you will need to bring something fairly substantial to the table. What are you contributing to building the business and how does the developer know that, should he or she build the product, it's going to be a financial success? Just know that we're constantly approached...

Andrea H Special Projects Director

January 12th, 2016

I am confused why someone would say "um...no," or that it is rare. Aren't a lot of businesses built with two (or more) co-founders and one being technical? If the answer is yes, how are these partnerships formed?

Bob Graham Engineering and Software

January 12th, 2016

You are really asking:

Is it possible for me to find someone willing to do "x" in return for "y" and will that produce my desired result.

People are giving you their opinions, based on their experience, but its incredibly difficult to answer because the truth is, it depends on you.

What I'd recommend is checking out a site like mixergy.com and listening to interviews. You will see that startups found their cofounders in a variety of ways. These include:

-Raising money and paying salary

-Working two jobs and paying salary

-Doing a 50-50 equity split with a CTO

-Getting presales and using them to pay the CTO

-Hiring someone offshore/overseas

-Hiring someone local part-time

-Scrapping the project together over weekend hackathons

-Learning to code themselves

and more

Most of these are less than ideal. But you aren't working with ideal. You are working with the resources you have available.

For each story, you will find one example where it worked and one example where it was a horribly bad situation.

I think its more about you. What can you MAKE happen? Check out this article:

waitbutwhy.com/2015/11/the-cook-and-the-chef-musks-secret-sauce.html

Brian McConnell

January 12th, 2016

Um... No...

Bob Graham Engineering and Software

January 12th, 2016

Hey Alexander,

The answer is of course, YES!

I can say this from experience. I have had 3 different CTO co-founders in the past for various projects that I used this exact style of agreement for.

Of course there is ALWAYS a way to do anything you want to do. How easy and fast will it be? Probably not that easy, but if you really want it, you will find a way.

Having a good CTO is like trying to go out and find a really great new friend. You can't force it. You just have to put yourself out there, meet a lot of people and eventually it will happen if you want it badly enough. Founder Dating is also a great resource.

It also helps tremendously if you've already done some up front leg work. Examples are:

-Find a seed investor

-Done some smoke tests to good results

-Build some partnerships

-Do some competitive/marketing analysis

-Built a readership list/blog with followers

-Started a community around what you want to build

-Become a good front end designer

-Take UX courses and become a UX expert

There are lots of ways to offer value in a startup besides just the code.

If you want a great CTO, I'd do a bunch of that legwork while you look. Each day you build your business before you have the CTO, you become more appealing.

Bob Graham Engineering and Software

January 12th, 2016

If you aren't making money, or have users, you just need an MVP right now.

Roger Wu co-founder at cooperatize, native advertising platform

January 12th, 2016

Depends on who the other co-founders are. If they aren't technical, what are they doing to show their competence? (and needing a product to sell otherwise they can't sell anything is not a valid excuse)

John Goes CTO at SlamData Inc.

January 14th, 2016

Time for a reality check.

You are asking someone who has at least $150,000 of earning potential to donate an unlimited amount of time and energy for a worthless piece of paper (stock), all pursuing an "idea" that, even under optimal circumstances, will almost certainly fail.

Anyone who agrees to this proposition suffers from impaired judgement or a complete lack of more attractive choices, neither of which bode well for your already-doomed startup.

All sustainable relationships have to be reciprocal. In your proposed scenario, the full-stack engineer of which you speak holds the entire balance of power, because they have the ability to create value by translating their knowledge and skills into working product. Unless you bring more to the table than a worthless idea, a worthless piece of paper, and possibly a worthless title, then you will not be able to create let alone sustain such a relationship.

What do I recommend?

First, look to your network. If you don't already have deep relationships with full-stack engineers -- relationships that establish mutual trust and respect -- then you're almost certainly doomed. On the other hand, if you DO know someone who trusts your business acumen, based on your track record (not necessarily in the same area), then there's hope you can form an alliance.

Most likely, based on the question, you don't have any relationships with full-stack engineers who would trust you enough to accept this risk. In that case, you're almost totally screwed.

I say almost, because you have three remaining choices:

First, you can raise a seed round. If you can't raise a seed round, then why should any engineer worth her salt trust your business acumen? They shouldn't.
Second, you can save some money or make enough money that you can compensate a full-stack engineer for her time. Don't look in NYC, look in other countries where the cost of living is much less.
Third, you can learn to become a full-stack engineer yourself. Programming is not something for rocket scientists, almost anyone can pick it up. If you aren't even willing to devote the time necessary to learn how to implement your idea, why should you expect someone else to be? A benefit of this approach is that you'll learn what it feels like to be on the receiving end: someone with an "idea" wanting you to fork over hundreds of thousands of dollars in exchange for something that's objectively worthless.

I tell you all this not to discourage you, but to present the facts. If you have an idea and are passionate about it, then you can make it happen. But don't expect it will come easy or for free, because it won't.

Joe Albano, PhD Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.

January 14th, 2016

Is your cofounder looking for a job?

This seems like it's part of a larger conversation that needs to (but often doesn't) happen in entrepreneurial circles:

What, exactly, does it mean to be a cofounder?

I see and appreciate that individuals want the value of their hard work recognized and compensated. BUT being a co/founder generally means taking on risk in exchange for the potential of higher reward.

If one founder is going to compensate a "cofounder" at market rates, regardless of the performance of the resulting product in the marketplace, isn't the cofounder actually an employee? Would an employee have equity participation at the same level as a "cofounder"?

There's nothing wrong with wanting the (illusion of) safety and security associated with having a job as an employee ... but being a cofounder is very different from being an employee. All of the cofounders need to have crystal clarity on expectations with respect to risks and rewards.

Jason Graves Software Architect - Nokia Bell Labs

January 12th, 2016

This is most likely a bad decision for both parties. As the visionary, you have this idea that you can't build yourself. So you reach out looking for a developer that's willing to be your partner in this idea. Good news... there are a TON of developers in the NYC area. Bad news... most of them have jobs, great benefits, and very impressive salaries. So the actual list of developers willing to work for equity gets reduced to a very low number. However, like the previous comments say, these developers do exist, and with a little work you might find one that bites.

But be warned, just because you find a developer, doesn't mean that they know how to build what you need. That's kind of like assuming that all guitar players can play the flute, simply because they are musicians.

As the saying goes...you get what you pay for. You should be able to place certain expectations on the application that is being developed. Afterall, this is your idea. But this can be very difficult when this person is your cofounder. Remember, your partner is doing all of this work for free. More often than not, these situations will end badly. And when that happens, you'll be exactly in the same place you are now, looking for another developer.

I suggest looking for a strong Systems Architect or Senior Fullstack Developer to bring on as your CTO. This is someone more likely to work for equity, since all they really have to do is plan, oversee, and serve as your technical advisor. The CTO position is the next logical step for Senior Developers and Systems Engineers, so being able to say that they are the "CTO" of a startup, might be enough to agree to be your co-founder. This person should be able to develop a plan, spec the product/service, design the API, and find talent (via students, recent grads). A CTO should serve as your Technical Advisor, Systems Planner/Architect, and basic knower of all that is App Development. Your CTO should be able to call BS on developers that aren't pulling their weight, or possibly leading you down the wrong path. Overall they are there to keep you from wasting time and money on the wrong developers.

Question stats