

Ask HN: what happens when founders are in different stations in life? - verbeno

I've been invited to found a company with an entrepreneur who is quite older and already established (has had startup success).  He (I presume) would be majority owner.  He brings experience as an operator and a wealth of connections; I bring technical skill.  Given this dynamic, can anyone speak from personal experience on what this kind of partnership was like in practice?
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fbnt
I'm looking forward to hear from people who's had direct experiences, but in
general I'd be more than skeptical towards someone significantly older than
me, with no technical skills, asking to "partner" in a startup project.
Chances are that he is somehow using your technical baggage in order to
achieve his personal goals, with no real interest in creating a true
partnership and using your status of so-called 'cofounder' as an expedient to
get the job done almost for free. It might not be your case, but I'd stay with
the eyes wide open anyway.

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jbooth
Yeah, if the guy's not providing technical know-how or a desparate, need-to-
make-it hustle, he better be bringing money.

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exline
I've had 2 experiences. The first was with an older entrepreneur who was also
very technical. He handled most of the business work and his share of
technical workload. He was open to letting me (and others) learn and take as
much of the business work as we wanted to gain experience. I had known him for
many years prior to doing this startup. Even though the startup eventually
failed, it was a great experience.

Second one was with an with a entrepreneur who was technical enough to be
dangerous. He had clear ideas on what our product could/should do but was
completely hands off on how we implemented it. Again he was willing to let me
into the business side if I choose to get involved in it. He had a much larger
ownership percentage than I did, but he also brought about most of the
business contacts and had a huge amount of domain knowledge (recognized expert
in the field.) He also personally financed the company when there were cash
flow issues. He had a personal line of credit to pay the bills that I did not
have to worry about.

So in both my cases, there was a clear establishment of ownership and
responsibilities. I think think the ownership and personal trust is the key.
In both my cases I didn't have to worry about getting screwed over by either
one. That is always a possibility, but it really pays to know who you are
going into business with. The saying that it is like a marriage is very
accurate. It is important to establish the value that each person brings to
the table. At both startups, there was a large amount of work done 'at risk'
that was converted into equity. I'd get that formula defined up front so that
it is established. This helps ensure that your work has value in everyone
eyes.

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philiphodgen
These arrangements require strong people willing to be rigorously honest with
each other.

Too often I have seen "Mr. Brains" partner up with "Mr. Wallet." Sooner or
later Mr. Brains thinks the business would be nowhere without his ideas. The
business would have launched successfully with a nickel of capital. Mr. Wallet
sooner or later thinks the business was self-ordained to succeed and even a
monkey could have launched it. His capital was the critical ingredient and you
could have been replaced by minimum wage high school kids.

In this situation -- far more than any other -- you need extremely good legal
documentation. (Define this as a buy-sell agreement, with extremely clear
mechanisms for how to deal with the situation where there is a disagreement
and one of you has to leave.) Otherwise you, as the person with the thinner
wallet, will lose if things come to push. In legal battles the win usually
goes to the person who has the financial staying power.

From your brief description of the situation, you are facing an odd hybrid of
getting a co-founder as well as getting an investor. Analyze the situation
from both perspectives.

In my experience, things seem to work better when business partners face
approximately equal risks and expect approximately equal (maybe I should say
proportional) rewards. Otherwise, the weaker one is a disguised at-will
employee with a contingent, equity-based salary.

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shaunster
It all depends on the type of business your establishing. If the business ties
into the physical world in some way and the agreement is that you handle the
technology while he handles everything else then this arrangement seems like a
good match. If instead, the business is entirely virtual then you may be
setting yourself up for frustration.

I have run 2 virtual-only businesses with partnerships such as the one you
have stated and each time it ended in frustration, unlike my real+virtual
businesses which were successful. The problem with being the only person with
technical skills in a virtual-only business is as follows:

1\. Your effort and risk is typically front-loaded, meaning that you are
required to create the entire product before your partner is able to utilize
the majority of their skills operating the business.

2\. If he is financing the business then prepare to feel like an employee. The
money guy is usually the decision guy as well.

3\. Prepare to possibly be taken for granted. Many non-technical partners read
media headlines regarding overseas outsourcing, teenage tech geniuses, and
turnkey software. This avalanche of information gives them the impression that
technical work is easily and cheaply contracted or purchased. The truth is
that paying for technical talent capable of creating a quality product is
still ridiculously expensive. Unfortunately this is something that is usually
learned through past experience so hopefully your partner either has that
experience or is smart enough to see through the media hype.

4\. The work never ends. Unlike a technical partnership where everyone carries
equal workload, you are responsible for it all. Every bug, every update and
every post-launch adjustment that takes your partner 5 seconds to request and
you 5 hours to implement. It's all on you, and as a startup don't expect to
get quality technical help anytime soon.

5\. We are all biased. Nothing is more annoying then spending 18 hours coding
only to see your partner make a few phone calls and call it a day. Even if
your partner was doing their job perfectly with those calls it is still only
natural to have days where you feel the workload is "unfair". This can apply
to both business partners when the responsibilities are different.

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hellweaver666
My co-founder is considerably older than me, but is effectively a silent
partner giving me free-reign on the project while providing the cash to get it
moving. He does have some experience in accounting and big-business though, so
he has some useful skills, but will mostly be staying out of the way.

If he had come to me with an idea, I would have been much more sceptical about
working with him as he has pretty much zero technical knowledge.

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c1sc0
I'm in the same boat & would absolutely love some good arguments to help me
claim my fair share.

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anamax
> good arguments to help me claim my fair share.

There is no such thing as a fair share.

You're bringing something to the table. So are other people. The deal doesn't
have to take place and it can take place with different people, so the
question is "what does it take to make a deal".

