Startups How much equity should I ask for to be the CTO and co-founder of a company with pre-seed funding? |
- How much equity should I ask for to be the CTO and co-founder of a company with pre-seed funding?
- Is there a newbie guide for startups in terms of pricing software, contracts, licences, support agreements, etc.
- How to find out if there's any demand for my app?
- Usability test before our first launch
- Which business model is more suitable for this? Craigslist or Airbnb?
- Options granted only 4.5 months after the start date
- Advice on starting myself or joining a team
- Just realized I'm kinda effed...
- Startup right after college?
- When to bring in non-technical cofounder?
- Share Dilution Among Founders
- Is it worth exercising ISO Options before an exit to get ahead of AMT tax?
- Any experience stories or tips for hardware + SaaS startup?
- Advice for investing in startup
- Dealing with broken promises in entrepreneurship
- Start-up restructure / buy-out
- Should I trademark my app's name?
- As a solo-founder how do you divide your time between sales-marketing, finance and development?
- How do you find your passion?
- Examples where employer enters into JV with employee
- Advisory role at a startup - Should I take it?
| How much equity should I ask for to be the CTO and co-founder of a company with pre-seed funding? Posted: 01 Jul 2021 01:53 PM PDT I was recently introduced to a CEO who has a startup in the works, and is about to close a pre-seed from angel investors that will bring in about 800k. I was introduced to them by one of the angel investors, as they have a tremendous amount of experience in this industry, but they are not tech oriented. I plan to join as a co-founder and CTO, with $0 salary and a 4 year vesting cliff on whatever shares I'm granted. My question is, how much should I reasonably ask for at this stage? The company is still very much in the idea phase, with the beginning of an MVP in place and a couple of partners ready to sign up when an MVP is ready. All of the startups I've been involved with in the past were ones started by myself, so I'm really not sure what kind of equity is reasonable for me as a co-founder. I've read some articles saying "up to 10%" and some saying to split it evenly amongst co-founders. Especially with an 800k pre-seed round, I feel as though my equity should be less than that of the CEO. [link] [comments]  |
| Posted: 01 Jul 2021 10:26 AM PDT I've made some really good financial software and have a customer who wants to buy it but I am a bit lost when it comes to the business side. Is there a good guide on getting things right on the first sale? The software is quite unique so it's hard to find comparable software to price it. Are there any good guides on how to price software? The closest thing would be accountancy software which are roughly $10-$30 per month. I'm not sure how much stock I should put into those prices since they employ massive economies of scale. My software has a much more limited level of functionality but is very niche so there isn't really an alternative. Should I look at a similar sort of pricing or should I think more in terms of how much time I expect to work on support, etc? Also are there any good templates for contracts/licences? Something that might cover what kind what support to provide and response timescales etc.? [link] [comments]  |
| How to find out if there's any demand for my app? Posted: 01 Jul 2021 07:28 PM PDT I started working on a pretty basic desktop app for remote employees, but I don't want to keep dumping time into the project if there's no demand or need for the app. What's a good way to find out if my app will actually be a useful tool? Get an mvp up and pitch it to some remote companies? This is probably unwarranted, but most remote companies have some sort of development aspect. My worry is that one I ask to test my app will just use their resources to build a clone and their reach to market it. [link] [comments]  |
| Usability test before our first launch Posted: 02 Jul 2021 01:00 AM PDT Hello there! I am currently making a mobile application helping high school students preparing for their college application. Before launching an app, I would like to talk to users in advance and make sure if their experience is pleasant enough. However, it's kinda hard to meet our actual user, especially at the time like this (I'm living outside of U.S. and therefore unable to meet users in person). So my question is, how you guys conduct user research? How do you recruit people? Thank you in advance! [link] [comments]  |
| Which business model is more suitable for this? Craigslist or Airbnb? Posted: 01 Jul 2021 11:00 PM PDT Not actually starting the next Craigslist or the next Airbnb. Im a web developer and just saw a potential in the local FB group the some people are looking for pet sitters. I replied that I can make a free matching website for pet owners and pet sitters because they said existing ones are inactive. Then I've got "yes"s. I am aware that this is not yet a good idea validation. People will easily say yes but the deal breaker is if they are really willing to sign up and pay. So for pet sitting, I have already bought the domain. Actually it's a good .com domain. I am initially thinking to make this just for free and maybe just think of how can I monetize the traffic later on but now I'm thinking maybe I should charge somehow because I got this question: If pet dies, got a wrong pet sitter, would I be responsible? If I will screen the pet sitters, ask them to submit IDs etc. it would be too much work for me for a free site. What I am thinking is which should be my approach? Classified ads model ~ something like Craigslist. Users are free to register and create account. Post pet sitting services. And under the site's terms, I will not be liable. User should screen by themselves who will they contact to. Marketplace model ~ somewhat like Airbnb, there will be verification and I'll earn commission when they booked using the site. Top up the fee model ~ not sure the best way to call this but saw similar site but for models. They collect model applications and blast email them when there's a gig from filmmakers who contacted them that they need models. Filmmakers have to pay them $250 per day per model. The model will only receive $150. So they take $100. And have contract with model that they can't go direct with the gig given by them. Which do you think will work? TIA [link] [comments]  |
| Options granted only 4.5 months after the start date Posted: 01 Jul 2021 09:11 PM PDT Hi Reddit, I need you expertise on stock options. My employment at According to the info I got from accounting, the price of the stock changed as follows (based on multiple 409a):
On
In addition to that I received one more incentive plan with the same vesting schedule as the original one. Let's call it Plan II:
Based on that I have two questions:
I am pretty sure I cannot do much about this situation, so I just want to understand if it's worth staying with Thanks in advance for your advice. [link] [comments]  |
| Advice on starting myself or joining a team Posted: 01 Jul 2021 03:40 PM PDT Hey guys, I wanted to get some input on a situation I'm in, as there's a lot of experienced people here. So a friend reached out with an idea that I also came up with, I didn't start developing because I was busy with other things, but now it's got me thinking that it could be something good. My friend has all his shit together, a plan, plans for funding and people who know how to get funding. I started on development for a demo today and I started thinking that maybe I should do this myself, I don't feel any motivation in developing something for someone else, but as soon as I think about developing it myself my mind starts racing with all the possibilities. So what would you do? Develop it myself, spend my own money on UI's, not sure if it's actually going to work out. Or go with a team, where I can get paid for it, and someone else can put the money in? [link] [comments]  |
| Just realized I'm kinda effed... Posted: 30 Jun 2021 09:43 PM PDT After reading through posts, I'm realizing how far behind I am in sales and marketing. We're building a responsive web app for speech therapists to collect data during their sessions, for context. I have been focusing on product and usability and my partner on development. I realize that I have been doing, what feels like, ineffective marketing. I think it's ineffective because I don't know what average metrics are for conversion, so it seems like so few people signing up. My goal is to presell to 10 people and I have 4 weeks to hit this goal. It's also the lull of the season for my industry, which should start picking up here in mid July. I know that I need a major course correction at this point, so open to hearing any and all feedback. Can I "catch up" and go marketing crazy in the next few weeks? Do I just focus on one subscriber, one platform, one campaign? [link] [comments]  |
| Posted: 01 Jul 2021 03:11 AM PDT As the title suggests, I'm an undergrad right now and well, my dad wants me to join his business (preferably)/have my own startup right after college, without any job experience. I don't have any job experience as of now, and I also do not know if jobs are my thing but I still think having a job for a few years is a good idea just so I can have an idea of what I like and all that. What has been your experience regarding jobs and moving onto startups? How did you guys decide whatever you wanted to do? Thanks! [link] [comments]  |
| When to bring in non-technical cofounder? Posted: 01 Jul 2021 07:06 AM PDT Hi Everyone. I'm a software engineer building a VR fitness startup. I've been working on the product for 6 months now and probably have another 3 months to go before I can bring some early alpha / beta users on board. I know I'm eventually going to need a co-founder to handle the non-technical side of the business and share the workload, but I'm unsure when is a good time to bring them in (I don't have anyone in mind yet). What should a non-technical founder be doing while the initial product is being created? [link] [comments]  |
| Posted: 01 Jul 2021 11:14 AM PDT Hey guys bit of a technical question: If founders have different equity in a company (ie among three founders let's say a 50-30-20 split) does equity get diluted (assume a 10% dilution) A) equally among the three (3.33% each) B) unequally among the three but all portions still get diluted (50 gives up 5, 30 gives up 3, 20 gives up 2) C) Equity is diluted first from the person with the most and then the others if necessary (50 gives up 10 to make it 40-30-20) Or is it just a case by case thing? Assume a Seed round for this [link] [comments]  |
| Is it worth exercising ISO Options before an exit to get ahead of AMT tax? Posted: 01 Jul 2021 11:04 AM PDT I work for a startup that I am 99% confident will successfully exit. Our option grants are for less than a dollar a share, and if we exit it will likely mean our shares are in the high 10's of dollars. I read somewhere that buying shares as you go and holding them while your income is low enough to not pay AMT was a good way to work around the giant tax you get once you exercise. Anyone have experience with this? [link] [comments]  |
| Any experience stories or tips for hardware + SaaS startup? Posted: 01 Jul 2021 02:03 AM PDT Hi. We are building a product where we have two main parts - hardware + software that aggregates the data coming from the hardware and provides different tools and functionality as the main value prop. Hardware is an enabler for us - it is collecting the data. In a simple form, it is a monitoring solution with sensor devices. We are working in industry 4.0. We have raised a decent amount (300k) of money for developing our solution but it is not enough. The R&D part is hard. The development part is also hard to manage, we have firmware development, hardware development, product design development, web development for the dashboard and tools. We have to have the money in order to manufacture the devices. Manufacturing is expensive in low quantities. There are a lot of moving pieces. B2B sales cycle is quite long, and besides that, we had some failures on the first launch. We have some traction, but no big-name companies to have that wow effect for investors. Also, it is harder to get investors, because not a lot of VCs want to invest in startups with a hardware component. Recently one investor declined us because they decided to invest in a similar company, but without hardware components (they are focusing on software for sensor devices only). I do understand that IP/patent is everything in the hardware game, we do have a patent in mind but it will add another level of complexity for our project and we do not have resources for applying for patents (not even talking about money for patent lawyers). Sometimes it feels like a big unmanageable clusterfk. I wanted to hear some experience stories from fellow founders who have done hardware. How did you manage such a big project with so many moving pieces? How did you attract the talent? We are giving equity but it is not enough and we all know how much the engineering team costs. Hardware engineers are even more expensive than web developers. How did you approach investors? What was your approach to "this can be cheaply and easily copied by china" ? Any tops on overall scaling rather than being just a traditional company that provides service? Any story and experience will be appreciated. [link] [comments]  |
| Advice for investing in startup Posted: 01 Jul 2021 10:16 AM PDT Can anyone give a little tidbit or advice about investing in start ups? What major questions should I be asking myself? I am thinking about investing in a company that recently became profitable in 10 months. The product has hit a few interesting places. [link] [comments]  |
| Dealing with broken promises in entrepreneurship Posted: 01 Jul 2021 09:53 AM PDT Thanks in part to the help of this community, our startup has received good feedback on our deck and has gotten serious looks from decision-makers at top VCs. Early in our pitching, we asked a successful entrepreneur for help reviewing our deck. The entrepreneur gave us feedback and told us they'd be happy to forward it to their contacts afterward. We thanked them and made sure to put that in writing in our correspondence. After they advised us to increase the deck's visual appeal, we asked for advice on how they make their decks so nice (a question the mods and people in this community advised we ask). They ignored our question. They did, however, provide some surface-level commentary on the presentation, broadly. After helping with a turn of the deck, the entrepreneur said that it now looks good enough and that they "think that is all (we) needed" and that we should be good to send it out for feedback and engagement. While we can keep hustling on our own and are grateful that they have helped us with revising the deck, we're a bit disappointed that the entrepreneur has ignored our request for advice on how they make their decks so cool and that the entrepreneur has gone back on their promise to forward our deck around. How should we handle this? Obviously, we want to be nice and keep relationships as warm as possible. But also we want to avoid a reputation for getting walked over. What would you recommend? How have you handled situations like these, and what outcomes have you experienced? [link] [comments]  |
| Start-up restructure / buy-out Posted: 01 Jul 2021 03:21 AM PDT Hey guys, I am working for a start-up that was founded by five people part-time. I was the first employee doing mostly sales. It is growing very slowly because of the lack of focus and commitment of the other five people.It is too small to pay all people and too big as a side gig. A couple founders are running out of money and have decided to focus on their other businesses.. One idea would be to leave for the better but I really believe in the product and took over many responsibilities in the last year so I could see myself taking over the business. One founder would be willing to go full-time as CTO. One would be willing to finance the project. The scenario would look like the following:
We have an existing saas product with paying customers. I have no money to buy equity so I would trade in my work and give up some salary. The alternative could possibly be to shut the start-up down. What do you think the equity for the CEO and CTO should look like? Right now the equity is all over the place but everyone knows that we need to restructure. I would say something between 15 and 25%, which would leave between 50% and 70% for the rest. [link] [comments]  |
| Should I trademark my app's name? Posted: 30 Jun 2021 07:44 AM PDT I have created an iOS and Android app that has less than 100 users. Should I spend time and resources trademarking the name? I don't have a logo but I do own the .com domain name. I have been told that its better to focus on getting more users. I am worried some one might trademark the name before me. [link] [comments]  |
| As a solo-founder how do you divide your time between sales-marketing, finance and development? Posted: 30 Jun 2021 08:39 AM PDT As the title suggests. As a solo-founder, I was wondering how everyone else divide their time between sales-marketing, finance and development for their business. I am a tech person, so it takes time for me to do sales-marketing and finance. If I start any of these activities, the development of the product suffers as I have to not only apply these skills, but I have to lalso earn them before applying! How did you divide your time between these activities and manage to gain desirable results? [link] [comments]  |
| Posted: 30 Jun 2021 02:22 PM PDT I'm a marketing consultant, recently graduated university last year. Working in marketing has opened my eyes to how profitable the industry is. Regarding starting my own business (in any industry) how do you find your passion? I believe I have the drive, determination, and persistence - but I don't know what exactly I'm passionate about. I'm a big coffee lover, I love reading, I suppose I am passionate about sustainable products.... How can I know what my passion(s) are so that I can attack the market with everything I've got? TIA people [link] [comments]  |
| Examples where employer enters into JV with employee Posted: 30 Jun 2021 03:07 PM PDT TL:DR: Created side company, current employer now keen on joint venture. Looking for examples where employer keeps employee whilst entering into joint venture with them. Hi all, over the past year I've been working on a side business. I'm now at a stage where my employer is interested in entering into a joint venture. I would still like to remain employed by my current company (for various reasons including job stability, IP sharing, alignment of interests etc) but also be involved in the JV. They are keen to do so but need examples of this being done to provide context for the board. Does anyone have any idea where/ if this has been done before. I have heard that this has happened at FB/Google/other big tech companies but can't find examples. Thanks! Edit: the company also has to remain a separate entity from my main employer due to regulatory reasons [link] [comments]  |
| Advisory role at a startup - Should I take it? Posted: 30 Jun 2021 07:36 AM PDT I started mentoring a startup a while back. Mostly on the technical side, as that is where my background is, but also on the business side as well. The mentoring was informal, and I mostly thought of it as a "pay-it-forward" type of deal, as I had similar mentoring when I was starting up my own company. Recently I was recently asked to join this startup as a formal advisor. They are offering the standard 1% equity, with 4-year vesting (3-month cliff) for pretty much what I do for them already, just slightly more regularly. However, I have 2 concerns.
What would you do/ask for in this situation? [link] [comments]  |
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