
Ask HN: Post verbal discussion, unsure about signing shareholders agreement - startupman
Apologies for the throwaway account.
Myself and 2 other developers are in a bit of a tough spot and wondered if HN had any advice. Here&#x27;s the situation:<p>The optimistic start: We are part of a 5 person SaaS startup. we believe we are currently nearing product market fit. 3 of us are developing the product - we all have worked full time for nearly a year (no salary). 2 guys with experience in the sector work part time (&lt;1 day &#x2F; week - no salary) and are doing: 1. sales 2. guiding feature development.<p>The difficult situation: There was a verbal agreement of an equity split before we started -- no specific conditions were discussed. We have incoorporated with only one of the devs as the sole director AND sole shareholder, with a view to officially assign more shares at a later date. We&#x27;re 11 months in and they haven&#x27;t really generated any tangible sales (3 or 4), and we feel they are not fulfilling their role enough to justify the huge cut of equity we discussed verbally. This is not just in converting leads into sales (which is of course product dependent) but in generating leads themselves (v. few leads have been generated) for demos etc. We have not signed any shareholders&#x27; agreement but discussion of it has begun. We are currently very hesitant to sign away 55% of the company on oversold promises of them being able to generate sales.<p>The questions:
We are really not interested in screwing them over, we just want to make sure that the split is truly equitable. We were wondering if the HN community had any thoughts on:
1. How much room do we have to negotiate better terms (we want to maintain the partnership, just for far less equity)
2. Do they have strong legal grounds to sustain the original split based on the verbal discussion<p>P.S. We are based in London, UK<p>Thanks in advance for any help - let us know if you have any specifying questions.
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calcsam
(1) I'd advise you to push out the sales guys -- they don't seem to be pulling
their weight. Feel free to give them 5% each for their work, whatever seems
reasonable, but not more than 15% total.

A startup is kind of like a marriage. If you don't trust your partner when
you're dating, you're not going to trust them when you get married.

You can do sales and product development too. It's a skill that can be
acquired.

(2) You'd better talk to a lawyer.

Keep in mind Thiel's law: a startup screwed up at it's foundation cannot be
fixed. You should use your muscle to make this right now, or it's all going to
fall apart sooner or later.

[http://blakemasters.com/post/21742864570/peter-thiels-
cs183-...](http://blakemasters.com/post/21742864570/peter-thiels-
cs183-startup-class-6-notes-essay)

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MrQuincle
Look at the future. You say there aren't enough leads per month from the
current team.

Perform sales yourself or hire someone. Use that performance as a baseline
against which they get equity. If they underperform you have facts rather than
feelings to start to talk about equity. If they overperform you'd like to have
them in the team after all.

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JSeymourATL
> we just want to make sure that the split is truly equitable.

Perceptions dominate all parts of negotiation. If they don't like you, don't
trust you, they won't hear you.

How do they value things? Learn their standards.

First: Have a human conversation, consider the world from their point-of-view.

On the subject of negotiating, Stuart Diamond is brilliant >
[https://www.youtube.com/watch?v=ks_FU9saToM&index=3&list=PLg...](https://www.youtube.com/watch?v=ks_FU9saToM&index=3&list=PLgKL8rAPQlStJth5n1rlBp04zjnxowiXj)

