Recently, I saw a question on Quora from an entrepreneur who was all in on her idea but was becoming frustrated with her putative cofounder. Her question was what should she do about a cofounder who can’t dedicate enough time to the startup because he has a full time job? Here’s my response:
Instead of focusing on the negatives, figure out how your friend can add value to your startup. Once you’ve aligned his skills/commitment to what you’re trying to accomplish then work with him to create metrics that he has to meet in order to get more equity through vesting options (or compensation in another way, maybe as a paid consultant or salesman). If he fails to reach those metrics on time then have a pathway that eventually leads to his graceful exit from the startup. In that scenario, if handled correctly your buddy will come to the conclusion that he just isn’t committed to the startup and will leave without a bad taste in his mouth.
Summarily banishing someone from a startup when they are able and willing to add something to your venture is a mistake early on unless you truly believe they’re not going to add anything or, even worse, hold you back. If you really believe he’s going to have a detrimental effect on your business then get rid of him now. But, if you think he can add something (i.e. connections with potential customers/investors, a high degree of knowledge in your industry, etc.) then try to work with him to come up with an equitable way to split the equity.
On a related note and not knowing your entrepreneurial history, starting a business is a lonely endeavor, especially for those who haven’t done it before. (Which is why we always recommend building out a team to the entrepreneurs that we work with at the CSUF Startup Incubator.) If you have plans on growing your business into something more significant than you and maybe a small team can handle then I would definitely recommend that you start building out a team as soon as possible. If your buddy isn’t a good fit then start recruiting others to join you. Working with others is good on the mental side of the equation for an entrepreneur and the more people you have working with you on a startup the more upside there is because these people will bring things to the table that you working alone cannot.
Agree? Disagree? What would you add?
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