Cofounder · Partnerships

Co-founder equity and partnership question

Jag Virk Founder and CEO journeyx

July 8th, 2020

I've got an early stage startup about a year old. I'm considering looking for a tech co-founder.


I'm non-technical, but bare with me for a second! I'm not looking based on idea alone. SO it'd be good to get some thoughts on split and partnership before I actively start looking.


I want to build an employee experience platform (think onboarding, training, and well being). As I'm non-technical, I did what I could:


* Prototype (mock ups) are done and about to do more customer validation over next few months

* Used open source tech to build a non so perfect platform which gets a small MRR

* Generated revenues from consulting work

* Continue selling the platform that I have - however I'm not very confident in selling that due to it's limitations and it's only doing 20% of what it's supposed to!


Here's what I will continue to do:

* Marketing, sales, operations, investor/customer relations, etc basically anything that's non-tech! I can even manage the customer facing website.

* Put money in towards marketing and sales activities

* Put money for hosting/server etc

* UX/UI design and convert to specs if required

* Put money in towards getting a supporting developer (part time, beginner level Asia/Eastern Europe to help save costs)


Would the following be reasonable?

For the co-founder, 20-30% Equity + some sort of remuneration (can't afford much, but say $10-$15K + percentage of sales). Is 20% too low?


Alternatively I'm just considering keeping on going, get a few more customers, validate the prototype further. Then go for a pre-seed round by end of the year. I'd need to get a tech lead in anyway after, but it'd be a much lower equity but higher standard salary.


Matt Cooper 20 Years Experience in Product Development and Digital Marketing. 500 Startups Alumni.

August 26th, 2020

Hey Jag, I'd take a look at www.slicingpie.com It's a Dynamic Equity framework that would solve most of the issues you've identified. I'm using it in my current startup. Ping me at matt@atomo.co if you have any questions.

Rob Sherali Tech hybrid manager available for new ventures and partnerships

July 8th, 2020

Hi Jag, I guess a lot of the devil is in the detail and happy to talk more - but I would try to continue to exhaust the validation phase with as many customers as far as possible without investing too much in the solution yet. Have you really validated you have a problem that needs to be solved, done your due diligence on the Customer types, done some non leading interviews about their problems and current workarounds, exhausted researching what looks to be a fair few alternatives (competition) in the market and got some feedback that gives you more than just 'positive vibes' on your solution, real actionable journey information about your potential customers.


Also there are often ways in which you can provide workarounds that help you develop your potential early adopters without actually developing the ground up product too soon.


All the best,


Rob

Heather Perkins Looking for Esports CTO Co-founder. You be the tech, I'll be the operations.

July 8th, 2020

Hi Jag,


I'm just going to apologize now and say that I can't help answer any of your questions, but I'm interested to see what feedback you do get, as I'm kind of in the same spot as you. I have this idea for a SaaS Applicant Tracking System to use in education (as I was an HRIS Administrator), and don't have the development skills either, an looking for a technical co-founder or anyone where we can build a company together.

Jag Virk Founder and CEO journeyx

July 9th, 2020

@Rob Sherali,

The idea is very well validated, unfortunately, the problem is being tackled by other recent start ups. There's no doubt the problem is worth solving and I still feel there is enough space in the market for it, plus the opportunity to expand intosolving other HR as well as L&D issues.

The workaround you mention, is already in place. However some of the recent feedback I have had from a prospect was that because the current platform is built on open source and limited in features, it wasn't attractive. That holds me back as well from continuing to sell it as a work around.


I've thought about hiring an agency or freelancer to build. But considering I will need a tech lead/CTO after anyway, why not start searching now. Hiring an agency has it's issues too, mainly cost and managing the support - especially if I continue to bootstrap it.


Having said that, I will continue to do more customer validation, in fact I'm going to try and get sign ups on an early access program if I can over next couple of months. Although given the current climate, it will be a tad tricky to do.


Jag Virk Founder and CEO journeyx

July 9th, 2020

Heather, thanks for commenting. Yes non-technical founders do have a challenge when trying to build a tech business. Having said that, there are many that have done it before us!


I've worked extensively with developers in the past so that works in my favor a little.


As far as HR is concerned, yes, we're both targeting the same/similar group of people. I do worry about the competition sometimes, however, there is a lot of room for innovation right now as well as room to play with. HR Is just so massive when you consider the entire end-to-end employee life cycle.


I've personally tried to do as much leg work as possible for this start up as you might notice based on the description in my original post including building something cheap and turning it into revenues. You may have to do something similar?


You can pay someone to create a prototype as well, or even wireframe it yourself, that will help communicate your idea better. I remember when I just 'talked about it' it was difficult. But when I started to show people, I started to get some amazing feedback.