I'm currently a co-founder of a startup that has been going for several months. We currently have 2 products released to market but are only just about to go through the incorporation process. There are 2 of us as co-founders and when we initially created the startup we decided on a 50/50 equity split proceeding forward and were to act as equal partners to get off the ground.
Shortly after things started moving nicely along and we've had some very strong interest on high levels of funding from VCs. However, as things progressed I noticed that my co-founder started to show some what I believe to be red flags:
- Immediately tried to navigate himself into being "CEO" and "in-charge" rather than the partnership we had for the early stages.
- Started doing private conversations/making decisions on partnerships or who we work with without consulting me.
- Attempted to start micro-managing me. Constantly asking me how much I've done, trying to set deadlines for me, telling me what I should do etc.
- Introduces himself in calls by saying that he "does everything in the company but also some of the technical side" as well / downplaying my contributions.
- Extremely tight on bringing in new partners for equity. Wants to offer 1% with no salary even though we are just 2 guys in our bedrooms right now. I want to motivate people and make them feel as partners rather than employees so would have preferred the 10-20%.
- Has indicated he wants salaries to be "market rate" for the position. i.e He will get a CEO salary which I'm going to assume is higher than a "CTO"
- His attitude/commentary is more around claiming a fat paycheck/getting loads of money than interest in the actual building, growth and the products.
Now on the C-level titles I honestly couldn't give a shit and think its kind of stupid to start calling ourselves CEO/CTO or whatever so really not bothered. Happy to let him be "CEO" if he wants to be although I do get concerned in regards to his decision making as he knows literally nothing about the industry we are operating in (Finance). I do have a pretty good knowledge of finance but would rather it was someone external with a solid background in it that was CEO. I'm not really into the whole "money/power" thing I just want to build cool stuff and have people use it.
We do not have a signed founders agreement and his preference was to self-write one and have me sign that but I'm now hesitant as I don't think it protects me enough so I've reached out to a lawyer to help me out and draft one.
From an IP perspective I create/design and code all of the products, run all the infrastructure, set up all pipelines etc. I own the name, the domain but he does contribute the UI & branding so overall if we were to result in a split I believe I would just need to replace the front-end and the logo which may take a couple days at worst.
Recently my thoughts have been to draft the co-founders agreement with a 65/35 or 60/40 equity split in my favour, along with provisions that I can not be removed or have my unvested equity taken away from me.
Am I out of line if I ask my co-founder to accept this or kick rocks? Am I an asshole for going back on my 50/50 word from previously? Should I set upfront decided salary caps so that we don't burn through our funding/end with an unequal split?
I know that this will end up making things very tense and is a really unhealthy start but I am too worried about being "maneuvered" out and end up with nothing given that I have created and own all of the underlying actual tech and I'm not all that motivated to work under these circumstances as ideas are a dime a dozen and I'm relatively confident I can just continue building cool stuff solo and the money/success really doesn't interest me all that much.
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