I am starting a company without enough money to pay a second person a salary, but I need the help. I've found someone who seems great - his previous work is beautiful, he has already done some good work on my project to show that he's serious, and he wants to join the company (part time).
Questions of percentage, vesting stock options, etc, abound. Is there a safe (enough) way to form a company with this man that I barely know?
Co-Founder Incorporation Stock Options
I've done this and it is/was the WORST decision of my life. The person I co-founded the company with almost 3 years ago was NOT the person I believed he was and the company has suffered because of it.
Another VERY important thing to note is that everything, including explicit responsibilities should be laid out in a contract. Thank god for me, my contract allows me to get out which I am executing now.
Before you start anything, get to know the person, I believe the easiest way to get to know someone is taking them out to lunch or dinner and see how they interact with the waiters and other staff there. This will tell you a lot about the person as you will see how they treat others..... of course some people are sly and they can put on a show but you need to look past that to really understand the person to see his/her true colors...
Hope this helps!
No. Forming a company with someone you barely know always bears a high risk. The only thing you can do is to actually work and socialize together over an extended period of time.
My personal opinion is not to form a company with someone you barely know. Regardless of needs and skills, the most important thing about founding a company is that you can actually get along really, really well in a multitude of situations. It helps if you both have been through similar phases in life and made similar experiences at work.
I considered posting this as a question, but I'll see how it works here. The two of you may need to disclose some personal financial records and credit scores. I don't know if this is common (Maybe I should post the question.). You don't want to go into business with someone who has not been able to handle their financials or prevent you from getting a business loan.
Get some personal and professional references just like you were hiring them as an employee.
You should also be prepared to offer you information as well. I would want to go into business with someone who cared enough to ask these things. But again, I'm not sure this is appropriate.
Get a lawyer.
Team is the thing to bet on - both for you and for any investor who is interested. A possible way is provide him a sustenance salary (food, basic accommodation, etc.) + a decent equity. He needn't be a Co-founder, but your 1st "rich" employee.