Tech cofounder, idea stage, vesting vs founder stock opinions

I’m working on an idea stage startup with a few other guys (still pre-wireframes).

I would be the tech cofounder in charge of building the MVP (anywhere from 2-5 months and around 20k-60k of my time).

Of course I’d also be responsible for ongoing feature updates, bug fixes, etc after launch (a full or part time commitment from my experience).

We’ve started to talk about equity this week. I’m easy going and would prefer to keep things simple. We initially agreed on a 4-way split and I’m okay with this equity percentage wise.

We’d discussed a generic 4 year vest and 1 year cliff.

However, thinking more about this, if I’m getting 25% vested monthly over 4 years and it takes me 4 months to build this… I’ll have invested 50k of my time at the most risky point of the venture and be essentially 2% vested at that point… the equivalent of investing 50k at a 2.5M valuation which is sort of high in the context of this specific venture and where it’s at now.

I’m not so much concerned about the absolute percentage, but rather the vesting schedule.

Should I be asking for a clause that provides some percentage as founders stock or at least some sort of accelerated vesting tied to delivery of the MVP?

Otherwise I could potentially build this thing into a company and be ousted with a dilut-able 2% stake

Again I don’t want to make incorporating any more complicated than it needs to be… anyone have clever ways they’ve tackled this in the past?

Thoughts?

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Startups – Rapid Growth and Innovation is in Our Very Nature!

“We were adamant about finding a one-step solution”: Interview with inne’s founder Eirini Rapti

On a rainy April day, I had the honour of interviewing Eirini Rapti, the founder and CEO of femtech startup inne – a hormone-based mini lab for women. Despite us being complete strangers, separated by two screens and a few thousand kilometres, the connection was instant and what started as a classical interview quickly became an in-depth conversation about life, product design, and everything in between. 

Over the last four years Erini, a healthcare professional gone entrepreneur has grown a diverse Berlin-based team that successfully launched their first product a few weeks ago. More than just a natural contraceptive method, inne is a radical self-knowledge tool for all the phases in a woman’s life. Since founding the company in 2016, Eirini has made the conscious effort to hire both designers and scientists to create a science-based product that is truly delightful for users. In the following interview, she tells us how the idea came about, why they chose Berlin as their base and what design, tech and science can learn from each other.

Eirini, thank you very much for taking the time to talk to me and congrats on your launch! Can you tell me a bit about your backstory and how Inne came to life?

It started with me meeting my partner. When we met, I was 32, currently single and not using any type of contraception. For the first time in my life, I made a conscious decision to stay clear of hormones and set up an appointment to get an IUD. After explaining to my gynaecologist that I thought this was my only non-hormonal option, she asked if I’d be open to trying the natural method. She whipped out a little piece of paper, drew up my cycle length, told me to buy a thermometer, what to look out for, gave me a few books to read and sent me on my way.

At some point, I wanted to find a tool to help me collect this data about myself, but the existing tech at the time was very much from the 80s, with bulky plastic hardware that just wasn’t very sophisticated. The science behind it was just as cumbersome. 

I decided to take matters into my own hands and create something that fits my lifestyle and could be just like the other fantastic tech products I used as extensions of my life from the kindle to my apple watch. The goal was to create a product that was small, lightweight, well-designed that could travel the world with me. This quickly turned into a vision to build a science-based company to accompany women throughout all their phases in life.

Regarding this high expectation on the products in your life to be well-designed, how did you manage to build this bridge between design and science in your company?

This has a twofold answer; one is my personal journey into delightful products that improve and simplify my life. I worked in medical evacuations for a long time and had to travel a lot and work in fast-paced, ever-changing environments. I learned to appreciate packing very little and having access to information fast. From Blackberrys to small computers, I always looked for tech that allowed me to live a full life, keep me connected with people at home, but made me light as a person. I designed a decluttered life for myself, which made me feel incredibly free.

Now for inne, specifically creating a product in FAM (fertility awareness method), I knew if I wanted to create something that women can benefit from, it has to be used properly at the right times of the day in order to be accurate. The only way to make sure these habits are built successfully is to create a beautiful product that can seamlessly integrate into people’s lifestyles – and even create a sense of delight. 

How has this “delightful design” approach influenced the setup of your team?

It has been great to see design and science intertwine and influence all parts of the business from hiring to product development to scientific testing. We have a fantastic Creative Director, Franzi, who used to work at IDEO and has brought in a lot of her design practices that have become critical to the way we do things. In January 2018 we were four people: our lead scientist, one research scientist, Franzi as the only designer and me. Today in 2020 we have three designers out of the team, which is a very high design ratio for a biotech company. 

Design has profoundly impacted the way we solve problems. In the first couple of years we had to make many scientific decisions: how we structure the tests, how we normalise saliva collection, how we make sure the strip isn’t removed too early – these are essentially interaction design touchpoints. Having Franzi there, giving her design input drove our scientific thinking into a creative problem-solving approach. We went into a prototyping mode quickly, we worked on intermediate solutions, something a purely science-based team would have never let happen. We pushed ourselves to fail fast so we could make our product user friendly and create delightful user experiences as early as possible.

Can you give me a concrete example on a product decision that was made like this? 

A good example is the saliva test. Pretty much every saliva test is a two-step process: one step to collect the saliva and another step where you have to place it somewhere to be analysed. From the beginning, we were adamant about finding a one-step solution. We said the users need to have as little steps as possible, how can we make this work? It became a complex mechanical problem, an engineering problem and became an iteration of many solution suggestions and countless failures until we finally got it right.

How was making a ‘one-step solution’ for the scientists and the others in the team?

Nothing has been easy, but the scientists that work with me were longing for this type of input. In general, scientists want to share their knowledge with the world, so developing a product that actually goes out to the world is hugely gratifying. Even though this approach doesn’t necessarily fit their training or their way of working, the “aha moments” make it all worthwhile. 

On the flip side, the rest of the team has profited immensely from the scientific approach, and each of us now set ourselves up to doubt even a good result, helping us strive for excellence.

People talk a lot about tech – in our product tech is not “just tech”, it’s also science. Many other companies have successfully applied design thinking to hardware and software and created amazing products. What we were doing as pioneers was not only applying a user-driven approach to create the software and hardware part of our product but also to the science part. 

What is the biggest piece of advice would you give to anyone else designing their product?

Don’t assume you know what people need, ask them. Do interviews, questionnaires, show prototypes and then filter out what you think will be useful.

Of all the places you could have chosen to set up shop, why did you choose Berlin?

When I did all of this, I knew I had about six months to figure out which scientific approach I would follow. My naive early entrepreneurial brain wanted to work with a university instead of having an in-house science team, which thankfully didn’t happen. We had three startup hubs as options: London, Berlin or Lisbon. London was where I spent my 20s, so been there, done that. In Lisbon, I didn’t have any ties. In Berlin, I had many contacts, mentors and an entrepreneurial support network. A friend and mentor, who then became one of the first angel investors in our product, offered me a desk in his office and it all sort of started from there. Now, four years later we have a lab within the Bayer CoLaborator in Wedding and our own office in Mitte. 

What’s up next for inne?

Last week we shipped our first set of products to the UK and Sweden and are now shipping in Germany too. It’s been exhilarating to see the first responses to the products. This year is about getting close to our customers and delighting them. Our number one priority is getting as much user feedback as we can and improving the product accordingly. 

Another big plan is a clinical study in the US, even if it will be delayed due to the current crisis, it is still scheduled to happen as soon as possible. We’ll also be going through FDA regulatory approval, which will be a big deal for us.

Closing off, what do you see for the femtech industry in the next 5-10 years?

Consolidation. I believe that women are looking for products that can take care of their various needs in female health and therefore I believe the industry will move towards a consolidation of services into ecosystems, thus serving women better. 

EU-Startups

I’ve met a developer who I think would be a great co founder, but he doesn’t use my preferred languages. Should this be a deal breaker?

I’ve been working on customer and concept development for a few weeks now and I’d like to build an MVP, it should take about a month. My brother is a serial entrepreneur who has given me advice along the way. He said I should be looking for a python developer and some reasons why.

I’ve had a few calls with potential co founders and not had any good ones, until yesterday. We clicked really well and he shares a passion for the problem I’m solving. It was a great chat and afterwards he followed up with an email summarising the chat, lots of detailed notes on the technical considerations, he even made a very crude MVP. I was really impressed. The only problem is that he builds in C# and my brother doesn’t think I should build in this, he feels quite strongly about it.

My question is… should this be a deal breaker or not? If the partnership is excellent, or at least seems it could be.

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Does single founder need vesting?

I'm setting up a DE c-corp using Gust Launch and need to set up stock grant. Right now I'm the only one working on the startup, and I may have a cofounder in the future but it's not 100%. Do I need to set up 4 year vesting even if I'm the only founder now? Vesting seems to add some unnecessary headache at this point like 83(b) election and so forth. Would appreciate any advice. Thanks a lot!

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Regarding Equity Cliffs and Vesting – If one founder stops contributing significantly – maybe takes on a second job or goes part-time on the startup – but doesn’t officially ‘leave’ the company, how does vesting apply? Do they have to get cutoff by the other members at a certain point?

I'm trying to figure out equity with one of my cofounders and they're a little unsure about their levels of long term commitment/involvement, they definitely foresee themselves staying involved in the company and are generally enthusiastic about it, but also talk about possibilities of finding other work as well to supplement down the line. I understand equity cliffs and vesting in general, but how does this work from an equity perspective if they significantly reduce their contributions? Would that count as dropping out of the vesting timeline (1 year cliff/ 4 year vesting)? Would it just come down to one cofounder saying "you're not contributing anymore, you're out?" What keeps a cofounder from keeping a foot in the door with little contribution?

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Startups – Rapid Growth and Innovation is in Our Very Nature!

[Legal – Ontario, Canada] [Investment & Securities] What is a “Founder” as far as the law is concerned?

I'm looking for more information about the term 'founder.' Each province has a similar statement about how they perceive a founder, but I'm not sure what that means in practice, or if there is pre-existing legal precedent. For example, an BC Securities document/) that lists exemptions on raising capital says:

“founder” means, in respect of an issuer, a person who,

(a) acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and

(b) at the time of the distribution or trade is actively involved in the business of the issuer;

Founders are therefore allowed to invest in the company without being 'accredited investors' which typically need to have quite high cash assets (a few M if I recall correctly).

There also seems to be limits on the number of people who can be 'founders' of a company – I believe in Ontario that number is approximately 50. That seems high for "organizing/substantially reorganizing the business of the issuer."

Who decides what the litmus on this is? Is there any legal precedent? How can I tell if each of these 50 people are in fact founders, or are at risk of being removed from this exemption (and what happens then?).

If you have, say 35 people who invest in the company, and they each arrange some aspect of the business (e.g. sally organizes the AGM, peter organizes the team to do initial UX/UI, etc.), does this pass the exemption test? How would someone know?

I am planning on speaking to a lawyer about this, I'm just wondering if there is something pre-existing that can clear this up, so that I can enter the conversation with more refined questions.

Thank you

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Algolia gets a new CEO as founder steps down

Search-as-a-service startup Algolia is announcing some changes at the helm of the startup. Co-founder and CEO Nicolas Dessaigne is transitioning to a non-operational role at the company. He’ll still be a board member, but Bernadette Nixon is joining the company to take on the CEO position.

Algolia is building a search engine API. The company doesn’t want to build the next Google. Instead, it wants to power the search box on your website or app with instant letter-by-letter search results.

The company is managing the search feature on Slack, Stripe, Under Armour, Twitch and 9,000 other companies. At its current run rate, Algolia processes 1.2 trillion searches a year. The company says it touches 1 in 6 web users each day.

“The story started right after the Series C,” Dessaigne told me. Algolia raised a $ 110 million Series C round at the end of 2019. “I was super excited but what was most exciting for me was the potential of the company.”

“Someone with more go-to-market experience would probably be a better person at achieving that potential,” he continued.

I asked more directly whether the decision to replace him as CEO came from the board of the company or not. “It really started on my side. The board was supportive of the decision but it didn’t come from them,” he said.

Nixon was previously the CEO of Alfresco, the company that developed an open source enterprise content-management startup that was acquired by private equity firm Thomas H. Lee Partners in 2018. In the past, she held various positions as chief revenue officer, executive vice president of sales and senior vice president of corporate sales in different software companies.

As you can see, Nixon has a ton of experience when it comes to sales and operations in general. Her experience will be valuable when it comes to scaling the startup.

“I’m excited to be now part of the Algolia team and to be leading the company as of today,” Nixon told me. Accel, the VC firm that led the Series C round in Algolia, was also an investor in Alfresco.

The transition is going to take a couple of months and Dessaigne will stick around until July. He says that he doesn’t have any concrete plan about what he’s going to do next.

Over the past year, Algolia has been ramping up executive hires. Jean-Louis Baffier joined as chief revenue officer, Ashley Stirrup joined as chief marketing officer, Kristie Rodenbush joined as chief people officer and Iain Hassall joined as chief financial officer. In other words, Algolia is growing up and preparing for the next phase. Now let’s see if it leads to an IPO or an acquisition by a bigger player.

Startups – TechCrunch

Founder and CEO of Career Contessa Lauren McGoodwin on Making Power Moves in Business

The following is excerpted from POWER MOVES. Copyright © 2020 by Lauren McGoodwin.  Reprinted here with permission from HarperBusiness, an imprint of HarperCollins Publishers

Power Moves are those unexpected, not-always-conventionally advisable actions and behaviors that make it possible to find fulfilling work you love—on your own terms. Power Moves have guided me through every difficult stage of my career. They’ve helped me think more holistically about my ambitions, my challenges and what I really want out of life. Power Moves are not only a unique approach to your career; they’re also the kinds of tailored-to-you decisions you make to ensure you’re living authentically and staying true to yourself—not some idea of what you should be.

After several years and a lot of lessons at Hulu, it was time for the next challenge—and a huge Power Move. Guided by my Hulu experience and my master’s thesis in 2013 on millennial women and career resources, I was inspired to launch Career Contessa, an online media platform and resource dedicated to providing women the very same career help I had needed.

I left a job I loved and jumped headfirst into the world of entrepreneurship to help women build successful and fulfilling careers, on their terms. It was equally exhilarating and terrifying.


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Power women, power moves

Back in 2013, I started Career Contessa featuring interviews with real women. What do I mean by “real”? Women who are not celebrities or influencers with millions of followers (though they have amazing stories too!).

Women whose stories you haven’t heard a million times, who’ve come to their success in unconventional ways, who have a unique point of view, who represent diverse experiences and geography, who have something original/compelling/thoughtful/profoundly valuable to say.

With these interviews I noticed that these women, with success and fulfillment, had a lot in common, including:

  • They were really in control of their careers
  • They were regular practitioners of Power Moves
  • Their career values were consistently similar

While anyone can make a random Power Move, the greatest benefits come to those who embrace Power Moves as an everyday “practice” or “lifestyle” to achieve the career they want. I’ve asked these powerhouse women with an array of different experiences a lot of questions about power, Power Moves, and how both have impacted their careers.

Sometimes (most of the time) the best way to learn is to listen to women who have been there and successfully done that and can show us what we can do with some grit, smarts, and, of course, a few Power Moves at the right time.


Related: Why Emotional Connection is Essential in Business

Dr. Joy Harden Bradford

Dr. Joy Harden Bradford, PhD, is a clinical psychologist based in Atlanta, Georgia, and the founder of Therapy for Black Girls, an online space dedicated to encouraging the mental wellness of black women and girls. She started the organization in 2014 in an effort to combat the stigma surrounding mental health issues that often prevents black women from seeking support.

For years, her main goal was to have a thriving private therapy practice, which she did, fairly quickly—but then, just when she thought her career would take a linear path, the dream began to change. Bradford began to realize she could make the most impact by not just treating her clients, but by making a Power Move to create her own media company, where she could distribute information far and wide, and a virtual database to support clients she did not have time to treat herself.

It was an ambitious dream that, initially at least, not everyone in her life understood.

“I remember very vividly having this conversation with my husband about starting the therapist directory. I’m tech savvy but not like a tech person. Like I could not build a directory myself. So, I was going to need to hire somebody to build this directory that I had a vision for. And we had a conversation, I can remember saying, ‘I’m going to need a couple of thousand dollars to start this thing.’ And him being very confused about, what are you doing? And how is this thing going to pay off? It hasn’t even been two years since the directory is in its current iteration, but it went from 90 therapists to over 1,200, so it definitely has been a huge payoff.”

Over the course of launching her digital platform, Bradford also began recording a popular podcast named “Therapy for Black Girls” (just like her site)—which, in 2019, had more than two million downloads.

With the podcast and with helping to produce her site’s videos, Bradford effectively transitioned from being a full-time licensed therapist to more of a media entrepreneur.

“So now I have a very small practice but am more full-time doing the podcast and the directory. And that Power Move (is) not something that I (ever) would’ve imagined, that is not at all what I planned for. I feel like I’m still kind of getting my grounding in developing this new business that has developed from my work.”


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Bradford’s goal was always to present mental health topics in a way that felt accessible and relevant, but the execution changed. She now says she is living out a fulfilled career, even if it’s different from the one she started with.

She even has a bit of unexpected celebrity from her venture, but—as you would imagine from a therapist—prioritizes not letting it go to her head.

“My support system—and really being able to stay connected to people who don’t see me as ‘Dr. Joy from Therapy for Black Girls,’ but just ‘Joy’—has been key to my staying grounded and true to myself.”

“Power Moves: How Women Can Pivot, Reboot and Build a Career of Purpose” is available now wherever books are sold and can be purchased via StartupNation.com.

The post Founder and CEO of Career Contessa Lauren McGoodwin on Making Power Moves in Business appeared first on StartupNation.

StartupNation

Help a founder out

Hey guys,

SId here. I was wondering if anyone could relate to what I have to say. I have two great ideas in the pipelines. However, it's hard keeping the ideas alive. I have existing debt on me which has kept up at even nights. I just find it hard to keep working on the idea without finds and the pressure to pay off the debt. I was wondering if you guys could give me advice or something.

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Startups – Rapid Growth and Innovation is in Our Very Nature!

How to navigate the process of finding a tech co founder after the initial zoom call?

So I am looking for a tech co founder to go 50/50 on a tech beauty startup. I have asked people in my network and have a couple of referrals, and also I've been approaching people on CoFounders Lab.

Other than the obvious list of skills I'm looking for, I'd really like someone to be psyched about the problem we'd be solving too. So far, I've had one call with a referral who is a contractor but was interested in the opportunity to co-found something. Obviously as its COVID, I can't really be meeting people, I can only zoom call them.

I'd say my first question is – would you ever consider co founding something with someone you've only zoom called? Obviously its not ideal but otherwise I can't really move forward with an MVP. I watched a YT vid with Michael Siebel who says that as long as you ditch the co founder within the first year (if the partnership isn't working out) you have not lost a lot.

Secondly, I had my first call with a referral yesterday. When I asked if he was originally looking to co found something he said he was interested, yeah. It seemed a bit lacklustre. I myself have been wanting to co found something for a super long time because I love the startup world and the problem I'm solving, I'm sure I could express it enthusiastically. Is it correct for me to assume it should be the same for him?

After the Zoom call, we decided to speak again in 7 days and he can think about some possible ideas/solutions. I guess I'm wondering – can anyone list out the next steps following the initial zoom call. Including at what point we should exchange some kind of contract? He seemed ready to accept the opportunity but it all seemed a bit lacklustre. I'm pretty confident in the research I've done for the product, but this part of the process I'm finding tough to navigate.

Thanks!

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