

Ask HN: Advice for some possible founders in a (semi-)unique situation? - notaslenderman

So, my friend and I have had (what we think is) an awesome idea for a product. We want to start a company off of it. However, here's the big catch: he's 18 and I'm 14. We're still in high school. Obviously there are some legal concerns because of that, so if you could provide some general counsel off that, that would be awesome. I also have two specific questions:<p>My first question is whether to file jointly or have him file singly, then immediately hire me and give me 50%. (Apparently there are greater risks to the former.)<p>My second question is not-so-unique. We've been in touch with an awesome designer who wants in on it, but he lives out of the country. Are there any specific concerns we should think about before actually hiring him?
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argonaut
For some reason my previous comment got killed. Let's try again (with some
edits for conciseness, and a mixup of the ages).

1\. I think incorporation is too premature. All you guys have is an idea. Its
the product that you build that actually matters. While it's a good idea for
you guys to come to a basic agreement as to how you guys will divide
equity/responsibilities in the future, it is too premature for any contracts
to get signed now. For all you know, a year from know the product/idea/team
could have imploded; not incorporating means you guys would not have any
paperwork to deal with (nor wasted money).

First, build a minimum viable product, then launch it, then see what traction
you guys are getting, while iterating. If you guys think you have something,
then start a company.

2\. I am also very concerned because it sounds like you guys also have school
to deal with (you seem to have several more years to go), which will make it
very difficult for you guys to commit to making your product a success.
Postponing college is an option for the 18 year old (taking a few years off),
but if the 18 year old takes a leave of absence from college or otherwise
postpones college while you still stay in high school, you guys will run into
issues where you're contributing less than the other. I honestly think it will
be nearly impossible to juggle school and work while also out-competing people
who do not have school to worry about. As you can see, there are a whole host
of issues you guys need to think through. Or maybe you've skipped a few grades
and I don't know it.

3\. A guy you met on the internet (and have never/barely worked with, and have
barely interacted with, and have never met face-to-face, and otherwise don't
really know personally) is not a potential co-founder. What if it turns out
that he's really flaky/lazy/abrasive/rude/generally bad? He is an unknown
quantity. It also complicates things quite extensively because you guys have
probably never had to manage someone (club leadership does not count). You are
better off hiring him as a contractor for now (and in the process gauge his
skills and his communication skills and also in the process improve your own
project management skills).

If you do go ahead with incorporation:

1\. Get parents involved (see if your parents know or are friends with any
lawyers who are familiar with incorporation or equity issues).

I am not intimately familiar with how equity is dealt with for minors, but I
would wildly guess that a parent of the 14 year old would have to sign all
legal documents for that 14 year old and also hold board seats/other
contractually significant positions. However, a trust or custodial account
might be able to be set up for the 14 year old. I am not sure about this.

~~~
devonbarrett
Speaking from the point of view of someone who is the current position and has
been for the last few years, as long as the health concerns of sleep
deprivation do not bother you, number two does not have to be a concern.

To the OP, the biggest issue I had was bank accounts, many services wanted
business bank accounts, which was a nightmare for the 14 year old me to try
and convince them to give me. In the end I settled for an account with only a
checkbook tied to it. I agree with what argonaut, before you make this
official 'test the waters' and see if it has the traction that would be worth
risking your education for.

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mansigandhi
My advice -

1\. Start building the product. Once you have a minimum viable product, show
it around. Get some potential customers on board (even if its for free). Have
them test it out and see that it actually works.

2\. Step 2 would be incorporation. With this, I would say get some legal help.

3\. How long have you known the designer? Have you worked with him before?

\- Get a contract in place. Make sure you own all the assets he creates. You
can find a "Freelance Contract Agreement" online.

\- Pay him on an hourly/monthly basis. Or give him some small equity...but if
you don't know him very well, don't make him a partner or co-owner. (not sure
if this is what you were considering)

\- Get all the assets he creates for your product. This includes
photoshop/illustrator files. You never know when you might need to switch
designers and you don't want to start all over again.

\- Set up a schedule that works for you and him. That way there is some level
of accountability and stability in getting work delivered

\- Start with a couple of smaller projects, like maybe the logo or buttons, to
figure out a good working pattern.

Edit: Updated formatting

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peterhunt
Depending on what you're doing I don't think you should worry too much about
the legal structure. Focus instead on building a killer product and actually
getting it built -- this is the hardest part and is most likely to mess you
up, not disputes over company ownership.

Even if there are disputes, disputes + shipping are better than not shipping
and no disputes.

If you have parents who are into this, one thing you could do is ask them to
hammer all of this out for you and just put your heads back down and keep
hacking.

Also, managing a remote worker is really hard, even moreso since you are so
young and likely don't have much experience with it. I would try to avoid this
if you can, or at the very least figure out a way to keep working
asynchronously. This is a very hard problem though.

Good luck!

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pfarrell
Don't bet anything but your time and sweat on it until you have proved you can
make money with it. Don't think you've come up with something so revolutionary
that you can't possibly tell anyone. Build as much as you can before you show
anyone. Words are cheap. You don't need a designer yet. Don't spend much time
worrying about what will happen when you are the next Facebook. 99.9999%
chance that won't happen... Spend your time making a better product. If it is
huge, you'll have time to work out that other stuff.

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orangethirty
Get your parents involved. Don't bring anyone in just yet. You are young and
have not dealt with too many evil people. Overall, have fun. This is your
chance to do something few eer get to enjoy.

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BoyWizard
Just build it!

Don't worry about all the other distractions. You might works on it for a week
then find the reason why nobody else has done it.

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trevelyan
Sign a short letter agreeing to terms and put off incorporation until you have
revenues. And do the design work yourself.

