Am I a co-founder?


3

I'm trying to figure out what my role is...

Backstory: Late last year (October/November) I was asked by an acquaintance If I'd be keen to help develop a SaaS product that he & his brother had designed.

At that point, Brother 1 & Brother 2 had been designing the solution for some time, & had settled on most of the core functionality. The system required a native iOS app, a server running a web app & database, & synchronisation between the 2 apps. B1 had already started on a prototype iOS app.

Initially my role was to help develop the iOS app, but in December my task was switched to creating the entire server-side (web app, database, & synchronisation), which I've been building since (8-12 hours a day, & most weekends mind you! Not that I mind, I'm really excited about the product!).

Now we have a MVP in the wild, & it looks like we'll have our first paying customers soon (they're trialling it now). All work so far has been unpaid & no renumeration has been formalised (just verbal "we'll pay you cash when we turn a profit, equity until then"). I'm now about to insist that a formal structure is defined so I know what I'm working for, it's long overdue. Not just for my sake - I think it's important that we're all on the same page & none of us have false ideas.

My question: Am I a co-founder? I'm unsure of the exact nomenclature. Clearly B1 & B2 are co-founders, but does the fact that I worked for sweat-equity, developing the core product at my own risk make me a co-founder, or just a post-paid employee? In either case, is it too brash for me to suggest something akin to Joels method as a benchmark?

I don't have a burning desire for the label per se, I just want to be fair in my approach, so I want to be sure I'm not under or over selling my part in the team. I'd like to go into the discussion with a realistic expectations. It's important to state that I highly value the team & love my work here, I'm certainly not trying to milk every penny, but I do want my efforts to be reflected, & my role/renumeration will play a large part in my sense of participation & therefore enthusiasm.

What do you think?

Co-Founder Development Equity Shares

asked Mar 4 '12 at 16:42
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Kyebosh
18 points

4 Answers


5

Until it's in writing, all you are is setting yourself up for disaster.

Get equity in writing, by a lawyer, now. Otherwise you're just being taken advantage of, and you're one disagreement or flash of greed away from being out the door with nothing.

Assuming that's not already the plan.

Protecting yourself and demanding things be done right isn't being rude unless they never intended to give you anything.

answered Mar 6 '12 at 05:41
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J. Jeffryes
216 points

1

Why do some many people make the same mistake? Why would you put significant effort into something, unless you have a clear deal in place?

The good news is that it may not be too late. Whatever code you wrote is yours. If you are critical to the company, you'll be able to negotiate something.

But first, you must ask yourself what you want. Do you want to be a co-founder, with 20-30% of stock, but not any cash? Or would you rather be a hired gun, who'd be happy to get paid $10,000 for all the code you wrote?

Once you know what you want, ask for it. You are still in a good position, but the longer you wait, the more likely this will turn ugly and you'll end up with nothing at all. No cash. No stock.

answered Mar 6 '12 at 07:29
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Alain Raynaud
10,927 points

0

"Co-founder" is not an official phrase and is just a title.

In general understanding, (co-)founders are individuals who were part of the company (employee, board member, or owner) when the company started, and made some essential contribution to the business. But the exact details may vary. Sometimes it means co-owners at the start, or at least those who contributed some amount of equity. Sometimes it means the "idea guys". Sometimes it means any Day-1 employee.

If the people who own the company agree you are a co-founder, then (if you ask) you can call yourself one.

If they don't agree, I suppose you can still call yourself one, but that would be unwise as it could lead to animus and legal threats.

The best course of action might be to describe your role in the business venture, rather than just looking for a title. Your contributions should speak for themselves. Very few people brag about being the co-founder of a failed venture unless the venture was otherwise notable.

answered Mar 6 '12 at 07:19
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Mark Beadles
502 points

0

It doesn't look like you were paid for your contributions to the project so you can't be any kind of a hired gun. However, the "(co-)founder" label is nothing but a title and is decided by the people running the project. Thus, talk to the Brother 1 & Brother 2 to settle both the title and the equity position, especially since you're about to get the first customer (as opposed to users & testers).

answered Mar 5 '12 at 01:21
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Dnbrv
1,963 points

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