Issues with Start-Up and Co-Founders


Currently I am stuck in a messy situation where I am the only designer/developer for the web driven start up, along with being co-founder, the other two co-founders (business guy and editor), are trying to push me to accept 10% rather then a 1/3 (which was what we originally agreed upon). From the beginning I made it clear I can only work part-time since I have a full-time job, and they agreed to it, but now they want to change the rules of engagement. There also is no signed contract, though one was drafted up stating we would all be 1/3 vested.

Since I can't come on full-time (they are working from home with no other jobs) until the start-up becomes profitable, they propose I make 10%. Since the site is content-focused with the site itself being the vessel which releases features and updates daily, I am curious as to what I am entitled to.

I strongly believe as the designer/developer my market value at half my rate (given I work part time) still equals the other two individually, when they're writing/creating content.

I am thinking of letting them know I disagree with their terms and fight for my 1/3. Also as a Plan B, request them not to use the development/design I have produced since it is still my Intellectual Property.

Thoughts? Thanks for the help!

Co-Founder Development Startup Costs Entrepreneurs Website

asked Apr 12 '12 at 03:23
6 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll

2 Answers


You need to find out their justification for 10%. Have you not met the development expectations? Did you make any commitments to get things done by a certain date? Get in writing what is required to have 33%. Do you bring more to the company than "just a programmer" or are you designing, testing, and documenting the site?

Find out if you are truly a partner in their mind or could they replace you with a part-time programmer with some salary deferment.

If your team cannot confront this issue and work out the details, you're going to fail.

answered Apr 12 '12 at 04:51
Jeff O
6,169 points


It really gets me going when I read about situations like this. Always, always, always get it in writing first! No one should engage in any business activity, especially with friends or co workers, without a written agreement. Things seem to always find a way to go south without something documented.

Start-ups in general have a pretty high failure rate. See this article with a reference to a study done by Harvard Business School: With that said, you have a choice to make but try to see it from their perspective before making that decision. Their working full-time on this, presumably, and are probably waiting and getting frustrated on your deliverables. This is understandable since you're working this as a part-time venture. From this frustration will come a feeling that your share of the work load is not equal to theirs and thereby arises a conflict.

If it were me, I would try to talk to them and set up a delivery schedule that fits all of the partners needs while keeping the equity split as it stands while getting the final agreement in writing. If a compromise can not be reached then maybe it's time to seriously evaluate the situation and if its something that remains profitable for you to continue.

Possibility 1: You could add up the cost of development so far and see if they would pay you for your services while giving up your shares or a compromise therein.

Possibility 2: You could take a lower share of the company, locked in without vesting and lease the software to the other partners for a determined rate.

I'm sure there are other possible scenarios to this but you are going to have to decide on a move that is most comfortable for you. In this same vein, if it we're me, I'd be very leery of doing further business with someone that does not stand by their word or agreement and is ready to change their minds at any given moment or whenever it fits their needs.

answered Apr 12 '12 at 04:56
670 points

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Co-Founder Development Startup Costs Entrepreneurs Website