Starting out, what should co-founders focus on more, structure or results?


-1

Roughly only 30% of the potential co-founders I chat with for 5-mins or more believe that getting meaningful results in the real world is less important than first reaching agreements about who owns what and why. Examples of things to be owned might included equity, control, intellectual property, etc.

Is it wrong to put off talking about who owns what and why, and if so, why?

(In general, my approach has just been to avoid co-founders that want to focus on creating a well defined ownership structure instead of focusing on results, but may I'm wrong. If so, please explain why.)

Co-Founder Negotiation

asked Apr 17 '12 at 02:20
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Blunders .
899 points

1 Answer


2

It really depends on the scope of the initial effort, how well you know the partners and the resource commitment.

By way of example suppose you are in college and your roommate is your friend from grade school. Over beer one night the two of you discuss an idea that you both think could be a money maker. It is a piece of software that could be written over spring break, but you are not really sure it could work. Neither of you have any other plans for spring break so you say, "What the heck, lets spend a week and see if it could work". Nobody is putting up any money or giving up a job so why not? It would be silly to say "Lets go hire a team of lawyers first and give them $10,000 to build the ideal corporate structure". Especially since you don't even know if the app will work.

Now for another example. Someone who you don't really know wants you to quit your job, put up $10,000 and go 50/50 with him on a new venture. He tells you, "lets just do it, we can worry about the legal details and who owns what later on after it is built." Well in that case run, don't walk.

answered Apr 17 '12 at 06:23
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Jonny Boats
4,848 points

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