

Ask HN: $100k and equity - Choices

So I've got this idea for a pretty massive vertical app but I'm not a developer. Talked to a couple hackers (working at legit companies so seemed pretty comfortable with salary) - no interest. Contacted a development group today who 'got it' immediately and want to do it. The thing is though, they don't want to go in as full partners but want $100K + equity for devel. They've also got the contacts for the money. I'm totally dependent on them for devel work, contacts and hooking up with advertisers. I'm working at my own company 9x6 hours so can only do the specs for my portion of the app and be running the prototypes real-time, everyday. My idea, their 80% of the work. What's a fair split if they round up the 100K? How about if I come up with the money?
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mgkimsal
Choices - I meant to write last night but got tied up. Being on that side of
the table, I get their motivation. However, that sounds like a rather large
amount of money.

LaunchBox Digital - an incubator around here - gives teams $20k I think, plus
connections and other resources. $100k is _lot_ of money to develop a product.
It's certainly not unreasonable if the specs call for it. But as someone else
said, they're going to get paid regardless, PLUS they want future revenue from
the idea.

I think you should shop around some more, and I'd be interested in talking to
you more about this. Contact me at mgkimsal@gmail.com - willing to consider a
money/equity split, and probably not anywhere near a $100k deal. :)

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Choices
Yes, the basic part is pretty knarly with some heavy brick and mortarish
aspects to it. The rest is pretty straightforward web stuff, I believe.

Thanks! I'll try to get in touch with LaunchBox today.

I'll drop you an email and you can see what I've got so far.

So what is a fair split?

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charliepark
$100K sounds like a _lot_ for an app. With equity on top of that? I'd stay
away.

Can you build a prototype of it? Even in Excel or something to get the general
logic worked out?

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Choices
OK, this is much more than just an app. It is capturing a lot of data at one
level, then there is the 'web level' where the public interacts with it. Lot
of opportunity for revenue at the public level immediately (targeted ads).
Vendors will be pushing 'specials' down to the first level when they see the
apps getting some traction.. .

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thomas11
Can you try to generate some test data first, and create a mockup of the web
interface? A web developer can do that and add some interactivity step by step
in relatively little time.

When you have a vision of a finished product, it seems like so much work to
get there. But usually you can break it down and find steps you can take
iteratively.

Mocking up the idea will show you more about its potential and how it should
be executed once developers start working on it for real.

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Choices
This is pretty much what I showed them. All the captured data, described how
the apps work, what makes the data so valuable, etc. Like I said, they got it
, but still made the case it was a lot of work.

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aberkowitz
The fact that the original people you talked to were not interested may be a
sign that your idea need refinement. You shouldn't take the development
group's interest as approval, as they get 100K regardless of your success.

Before you continue, you should conduct focus groups with people who have
knowledge of the subject area. Best of luck.

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Choices
When I was talking to the first couple of people, I hadn't really fleshed out
the details clearly enough. And they really are happy in their corp jobs.

Yes, they get the 100k, but I would probably keep more equity that way. I was
surprised at how genuinely excited they became as they realized their own need
for the web level features. And, of course, they immediately took it mobile.

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moonpolysoft
Sounds like you are going to get screwed if you go with the dev group.
Especially since you will be talking to investors to which they will be
introducing you.

Keep pounding the streets to find your technical co-founder. Go to meetups and
other events. It's just like dating.

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Choices
Damn, I would love to find some people to go with this. Problem is, in one
sense, it's a fairly obvious service but there's only room for one of them
(database, ground level), so whoever executes first owns the world (really :)

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moonpolysoft
I know you think your idea is the best invention since alcohol, but it
probably is not. Given the choice between a half-assed execution of your
awesome idea and finding the right person who can execute any idea I would
choose the latter.

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moonpolysoft
Also I'd like to add that you should mention the name of the dev group. What
they're doing is certainly shady, if not completely unethical.

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Choices
Well, they ARE a dev group and are customarily paid for their work. Also, this
is pretty big and portions will be shipped overseas so there will be real
costs incurred.If things get too weird, I'll post here.

