Having a parent as a co-founder, issues and solutions


6

My dad has a business idea. Being much older than me, and having previously worked in software companies for decades, my dad is more experienced in business than I am - although he has never ran or started his own business.

So we are thinking of starting a small business (not a fast-growing one though) together.

I am 19 years old, and in college. I have zero business experience. But I have the technical skills to make a complete first prototype in order to get feedback from customers.

Ideally, my dad would be one of the co-founders. He did, after all, conceive of the initial idea, and his ideas about product features and marketing are more mature compared to my own ideas. I would be the other co-founder, in charge of all things technical.

But here are some problems.

As helpful as my dad's ideas are compared to my own, his thinking is stuck in an older-generation perspective. He isn't a good listener, and can't understand anything outside of what he already knows. He understands enough to think of the initial idea, product features, and marketing approaches.

Because I cannot effectively communicate new information or ideas with my dad, and because he isn't receptive to learning, I think, in my opinion, it would be good (previously accidentally typed 'bad') for the business if he only acted as an advisor. I don't want to ignore that he did conceive of the initial idea, and that his product ideas are more 'mature' than mine. But I think that if he took an active role in the business, it would quickly fall apart. In other words, he and I have a difference in viewpoint, and he isn't receptive to any viewpoint but his own. He isn't aggressive about it. He just doesn't seem to be willing to learn, anything.

I believe the best solution is to find a second co-founder. I have one in mind, one who is receptive, responsible, and actually much more intelligent than I am, if it matters. Having briefly discussed this with my dad, I don't think he minds me bringing in a second co-founder.

But what portion of equity should my dad receive in this soon-to-be three-person agreement? Or only two-person agreement? What would you do in my situation? I don't want to raise any disagreements; I'd just like to focus on developing the idea.

Getting Started Co-Founder

asked Jul 8 '13 at 16:56
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Kevin
31 points
  • [Relevant answer](http://www.brightjourney.com/q/forming-new-software-startup-allocate-ownership-fairly): "**Shouldn't I get more equity because it was my idea?** No. Ideas are pretty much worthless. It is not worth the arguments it would cause to pay someone in equity for an idea. If one of you had the idea but you both quit your jobs and started working at the same time, you should both get the same amount of equity. Working on the company is what causes value, not thinking up some crazy invention in the shower." – Kevin 6 years ago
  • It seems a bit like you have a pretty dysfunctional relationship already, so going into business is likely to be less than optimum. Maybe try to come to some understanding where he agrees that you should run with the idea on your own, with him as *informal* advisor, perhaps. He shouldn't begrudge this, even though it was his initial idea, as ideas are worthless without execution. Good luck. – Steve Jones 6 years ago
  • @SteveJones, I don't think this necessarily changes your comment, but I mistyped one critical word in that post (now corrected). – Kevin 6 years ago
  • Yes, I think it would be good, but only informally, not on the board. IMHO, YMMV, etc, obviously. – Steve Jones 6 years ago

4 Answers


4

Consider the following:

“When I was a boy of 14, my father was so ignorant I could hardly
stand to have the old man around. But when I got to be 21, I was
astonished by how much he’d learned in seven years.”


-- Mark Twain

I wouldn't be so quick to dismiss his perspectives - depending on the market you are targeting, his insight & experience may prove valuable.

At the same time, that doesn't mean that you have to keep him on as an active co-founder. Some sort of advisory position sounds like it could smooth out the differences. At 19, likely he is more on an advisor to your live adventures anyway.

I would also question why you are so quick to add another person when you are capable of creating a first prototype that can be evaluated by prospective customers. Go it alone for a while under the advisor arrangement before jumping into another relationship that may not be so easy to unwind.

answered Jul 9 '13 at 03:43
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Jim Galley
9,952 points
  • I think "He isn't a good listener, and can't understand anything outside of what he already knows." is an interesting comment, especially when combined with "Because I cannot effectively communicate new information or ideas with my dad, and because he isn't receptive to learning"... so is *he* unreceptive to learning or are you approaching him the wrong way? Is he a poor listener or just not listening to you? – Casey Software 6 years ago

2

Been there done that. If other siblings could become involved, watch out.

My fathers insistence on absolutely flawless documentation meant we could release NOTHING for long periods of time because the documentation wasn't "finished". I had to resolve that one by just releasing without his approval. He never finished editing a single revision that was sent to him. (The manual was 200+ pages)

I built the software, he sold it, then my sister got involved with the selling and brought her periodically useless husband into selling. Her husband would have months where he did well, then would do nothing for multiple months, but he was untouchable because he was "family", she would invade other peoples territory and scalp sales and there was nothing that could be done because she was the golden child.

In the end, I left the company when the revenue was about $4mil/year. I also left the family and now consider myself to be an orphan. FML

Your father is always going to be a parent in your relationship, (no matter how much you want him to be a business partner) and he's going to expect to be treated that way, which means in any business dealing, his word carries more weight than yours. Compensate him for the idea, invite him to be a part of the board (but not the chairman), and run the business unfettered by family baggage.

I don't see how family and business can really mix unless you never, ever, ever experience any kind of problem, but you have a better chance of winning the lottery jackpot. You already have communication issues, they won't get better when money and employees get involved.

You want to give him 10% for his idea, that's up to you, without someone to execute on the idea he'd have nothing but an idea. Having another co-founder that you can work with can be great, but if I was him, I'd demand 51% so you and your father couldn't gang up on me.

answered Jul 11 '13 at 07:33
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Mark0978
274 points

1

From experience, don't co-found with someone where you know there will be problems ahead in that relationship.

You nearly know that already. If your Dad can't learn and expects his own way, that's game over. Startups are hard, so how will you sustain drive and momentum when you're doing something you are certain is wrong, just to placate your co-founder?

You have to talk to him about this directly and honestly. You'd be crazy to lose the experience he has and the support he could offer, so the question isn't whether he'll be involved, just how.

One final note: lots of startups fail because they're aligned with themselves, but out of sync with the world. Every great team I know either embraces disagreement, or actively seeks it. You make the best judgements when the choices are put forward with passion and argued with vigor. Then you choose, and move ahead together.

answered Jul 12 '13 at 17:40
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Jeremy Parsons
5,197 points

0

"What would you do in my situation?"
I have been in your situation and hopefully can assist. The very first thing is that there is obviously respect between the two of you. This is critical for any partnership and is make or break. Like any partnership, there does need to be accountability in different areas, or responsibilities. While debate is healthy and opinions should always be considered, if the accountability for an area of the business sits with you, it should be your call. If you can all (you and your father and potential 3rd partner) agree with this then you should divide up the responsibilities / areas of the business accordingly and then you need to abide by them.

After doing that, a working relationship and a deeper understanding of each others ability's can develop. It may be easier to have the shareholding discussion after understanding the responsibilities.

answered Jul 8 '13 at 21:37
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Barney
1 point
  • I don't think this necessarily changes your answer, but I mistyped one critical word in that post (now corrected). – Kevin 6 years ago

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