Ask HN: Going into business with friend and her mom

[tomfellow]

Hi,

My friend and I have worked close for these last few years. Her and I are both software devs and often do side projects for fun.

Her mom was very successful in her industry and owned a few businesses. Recently I was approached to start something new with Friend + Mom. Her and I will code it up and the mother (cant say mom again) will handle logistics.

Obviously this is a weird dynamic.

This is way ahead but just thinking how do I cover myself without coming across as caring about the wrong things? If we split it 3 ways then really I am outnumbered. I was thinking we could do 33,33,33 and just ask for 2 votes and any disagreements go to arbitrage.

That said, I have never dealt with any of this, its never been a family situation. I also feel like I am getting ahead of myself. But would want the information when it presents itself. Thanks

[davismwfl]

Just hear out what they are thinking first. My guess is if Mom has been quite successful prior she may not be thinking a 3 way split to begin with, especially if she is kicking in funds. If you are all contributing funds in equal amounts that'd be different. It wouldn't shock me if she said 51, 24.5, 24.5. So that's why I'd say hear out what they are thinking first then give it a think.

I grew up in family businesses, where the primary business was a software business, and so I went through all the fun family work dynamics. I have also consulted for a number of family business both big and small, usually they have some interesting dynamics to work through and you have to navigate waters that have history far beyond what you have any right to know. lol. FWIW, I am not someone who warns people away from a family business, but just like any business partner you need to feel things out to see how conflict resolution will work, how communication feels, are the goals aligned etc and you need to understand the dynamic between mom & daughter too.

How do you get to these conversations without sounding like you care about the wrong things is by being honest. "Hey friend, we work really well together and I thoroughly enjoy that time, I am super interested in this project but obviously there are logistics about how it all gets setup that I'd like to hear your and your mom's thoughts on. Can we just have a chat?" I'd even suggest saying you are open to different ideas and don't have any fixed notions yet, so wanted to hear their thoughts etc. This way it is letting them tell you their thoughts, see how they do it together, does one override the other all the time? Are they even on the same page? etc. Also, by saying you don't have any fixed notions yet (or something like that), you are leaving the door open to you changing your mind or needing to think to solidify your own ideas without them feeling like you are being douche.

[GFischer]

I think putting this kind of thing across the table at the beginning is better and can save confusion.

I was spared having to confront my cofounder (of a now failed startup) by applying for an incubator that had us sign the split up front and have us have those conversations as part of applying, but that definitely helped.

Sounds like a good opportunity if she's succesful! Business acumen is NOT to be discounted!

[uberman]

Initial ownership should really be based on at risk contribution in my opinion. While there are three founders, I don't believe that must imply an event 3 way split.

Tally up what each person brings to the table and places at risk then divide the ownership based on that.

That said, some jurisdictions give tax and other incentives to businesses owned by minorities and women. It could be well in your favor to see that they have a majority position (assuming you are not also a woman).