Yeah I even shared that video with them to help explain my thoughts.
They claim that they plan on investing up to $50k in the first year, which was additional justification for a lower equity split. But again, this feels strange to me - they're basing current equity split off of projected funding? Is that weird? If it was just based off the current few thousand dollars that have been invested that would make sense to me. (But the few thousand dollar difference still wouldn't justify an equity difference so high)
This does bring up a good point though. The founder claims that they would probably be contributing a lot more cash than me, and thus taking on more risk. And on top of that, they don't want me to get entangled with voting rights on how to spend cash if I would not be the one contributing the most cash, thus, less equity. How do founders reconcile differences in co-founder funding early on? And especially after equity has already been distributed?
Idk.. this all seems so ridiculous to me. No? The company is currently worthless - difference in a few thousand dollars seem to pale in comparison to the execution abilities of creating a solid product. Of course, maybe my execution abilities suck, but thats what the 1 year cliff is for.
/rant
Anyways. I told them I'm out.
They claim that they plan on investing up to $50k in the first year, which was additional justification for a lower equity split. But again, this feels strange to me - they're basing current equity split off of projected funding? Is that weird? If it was just based off the current few thousand dollars that have been invested that would make sense to me. (But the few thousand dollar difference still wouldn't justify an equity difference so high)
This does bring up a good point though. The founder claims that they would probably be contributing a lot more cash than me, and thus taking on more risk. And on top of that, they don't want me to get entangled with voting rights on how to spend cash if I would not be the one contributing the most cash, thus, less equity. How do founders reconcile differences in co-founder funding early on? And especially after equity has already been distributed?
Idk.. this all seems so ridiculous to me. No? The company is currently worthless - difference in a few thousand dollars seem to pale in comparison to the execution abilities of creating a solid product. Of course, maybe my execution abilities suck, but thats what the 1 year cliff is for.
/rant
Anyways. I told them I'm out.