Can I have different co founders on different parts of the company?


2

I want to launch different web services which have different co founders under one company, And still keep them separated from each other? for example should one of the apps not do so well I don't want it dragging the others with it. Yes I know it would be better to have different companies but I'm doing this mainly for branding.

Something like Google doc and Google android. If android fails it wont drag docs or the actual search engine down with it, but the brand remains intact(yes Google as a whole might take a negative hit but that's something I'm willing to take). I would just fall under the failed attempts list, kind of like how Google wave did.

OK so basically how can I do this, and still keep them separated?

also is it possible to just invest on one part of a company, like just android and not Google as a whole? If so

Getting Started Strategy Legal Branding

asked Mar 9 '12 at 19:01
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I Scotts
152 points
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4 Answers


3

Don't bring on the other partners as cofounders, just give them profit sharing in the products they are involved with.

answered Mar 10 '12 at 00:26
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Joel Friedlaender
5,007 points

3

As concerns legal structures, you could form a limited liability company (LLC). LLC Operating Agreements offer virtually unlimited flexibility in specifying multiple classes of membership with different economic interests, voting rights, etc. The post Can an LLC have Members with a Non-ownership Economic Interest? discusses a multi-class LLC that I formed for a client.

Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.

answered Mar 10 '12 at 04:57
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Dana Shultz
6,015 points

1

There are many problems with such a setup.

First, you'll have one company with too many founders. Each of them will want to own a share significant enough to justify their own involvement. You can try giving them shares based on the value of each product within the company but not everyone will be happy. In the end, you'll end up with a split where the majority stake will be in the hands of 3+ shareholders, which will make it hard to make crucial decisions in the early stages. More importantly, you create the potential for very nasty corporate culture because each of the "departments" will be vying for life and some of your co-founders may gang-up to vote someone else out.

Second, you won't have enough resources to run the company efficiently. You might have enough time for each of the projects in the first couple of months but as they start growing you'll run out of it. You might be able to build decent teams for each of them but then there'll be the question of your value to each of the products.

Finally, the ownership structure will be so complicated that very few investors will be even slightly interested to work with you. The math, due diligence, and the paperwork to cover it all will be so extensive and costly that your company better be worth billions in the long run for a serious investor consider.

answered Mar 10 '12 at 05:01
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Dnbrv
1,963 points

0

Another option would be:

Create your own company - MyBrandNameHoldings.
Use that company to be a "partner" in the other ventures: MyBrandNameVenture1, MyBrandNameVenture2, etc. In each of these daughter companies you can have different partners.

answered Mar 16 '12 at 01:23
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Sunny
101 points

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