Upon meeting the team (3 management people, and one software developer), we discussed their current state and it was mostly concepts and they really didn’t have much other than that. And given that this is an IOT idea, they really wouldn’t be able to implement anything without the hardware anyway. Also, there was no funding yet and no apparent investor yet. (Still none as of present). But looking at their background, they do seem to have the network and connections.
Nevertheless, having already done a similar project in the past and already having the crucial materials on hand to implement it, I decided to get involved with them out of curiosity. They didn’t have to spend a dime and I didn’t even ask them for anything. Again, it was mostly out of curiosity.
After a week, I produced a working prototype and showed it to them. With the hardware proven to work, they can now start with the software. Now, this was probably where alarm bells started ringing in my head. You see, they were asking about my compensation (well, not really asking but more of ‘hinting’). Of course, they brought up equities as an option. So I was like: “Hey. Why not see where this goes?” And I proceeded with development during my spare time still doing it for free.
Fast forward a month, the prototype is now an MVP and they are now looking to pitch it. So with that, we recently discussed the responsibilities, equities, and other stuff, since it is about to materialize. At this point, I’m starting to feel that I’m probably biting off more than I can chew.
For equities, the shares were computed as follows:
Management Guy 1: ~35% (Co-founder, Idea source, Finance, investor relations, etc.)
Management Guy 2: ~30% (Founding Partner, Marketing, PR, etc.)
Management Guy 3: ~15% (Co-founder, Idea source, Operations, etc.)
Software Guy: ~10% (Founding Partner, Software, etc.)
Hardware Guy: ~10% (Founding Partner, Hardware, etc.)
Not that I disagree with it as I am aware that the management guys will do the heavy lifting in the long run. But the things is, we’re not even incorporated yet and we don’t even have funding yet. They’re also asking for our codes and designs already. The software guy even has a problem with it. As of now, this is still a point of issue. (There is a dissolution clause but it is still yet to be discussed.)
Also, another issue I have is the non-compete clause. By being involved in that startup, I am expected to give up all my other projects even if they are not related to their startup. Not sure if I misinterpreted the clause but management guy 1 said that it was indeed the case.
With that, I really don’t know how to proceed with this. But do note that the team has only discussed this matters once and we are going to discuss this again as the prior got a bit too tense. Any inputs would surely be appreciated.
Got involved in a startup. No prior startup experience. Created an MVP with no pay. Got offered equity and promised a salary when they get funding. Expecting me to give them the codes and designs *now* even when there is still no funding and investors. Also going to be required to commit full time to their startup and wrap up other projects that are still in progress. Feel like getting the short end of the stick.