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Comment by robotjosh | Hacker News Reader

I cofounded a startup that had all of these issues! I was the technical founder along with 2 non-technical founders, they offered me 10% equity to develop a hardware product. Seemed like a good deal, nearly finished my work over 6 months. Then we get into techstars and I have to shut down my independent contractor practice and come on full time with a shitty salary to keep my equity. Also, I had to redesign the product in a way that added several magnitudes more work. Another problem was that one of the non-technical cofounders started calling himself the CTO and started ordering me around on technical issues that I have an education in and over a decade of experience on. After demanding to be an equal partner and CTO, I was kicked out with no equity and no nothing.

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I'm sorry man. I was forced out of my first startup last year. It was very traumatic. It's so obvious what you should have done in hindsight but that doesn't help. I wish you the best if luck in the future.

Whats obvious that I should have done? These guys were my friends and only acted like this because they have an advisor they trust telling them to.

They were not your friends. Friends don't do that.

This was a long scam then. Over a year of being gym partners, playing racquetball, drinking, all the stuff you would do with people you consider friends.

Pretty much.

Please don't take my comment the wrong way. I understand it can be considered somewhat snarky.

An advisor did not force any of your "friends" to do what they did. They made a conscious decision to act.

People screw each other all the time. It's part of life. The main thing is that you learn from this.

I created an account to reply.

A YEAR! MF! That's meant to be long! FTS! A friend is someone you have validate of ten or twenty years of shared adventure. Treat everyone else as a possible friend (and likely tosser).

I have some bad news for you :(

I'm a day late, but it seems that nobody has answered your question. Here are some things you could have done differently:

- Have a vesting schedule for your equity. This way if things go south, you'll have a certain portion of your equity vested. - Negotiate a higher equity stake in the first place if you're playing such a founding role. In my opinion, if the product didn't exist before you joined the team, then you're a founder. Remember that we're looking at this with the benefit of hindsight. - Made the agreement up front that you had control over the technical decisions since you have the expertise to make those decisions.

I should have done these things but I let my guard down. I'm in a city trying to be a new startup city so there was a lot of attention and money thrown at one of the first startups. Everything was given to us, everyone wanted to advise and invest in us. I assumed this community would make sure nobody on this team screws each other because it would look bad. I owned 10% outright but was dazzled by techstars into signing papers that put me on a vesting cliff.

In the eyes of your cofounders, you weren't the cofounder. You were the mark.

I may not have been considered a real cofounder but I was there at the first brainstorming and had all of the technical ideas. I had a lot more ideas since and am building another team to start the business again. Forced to bootstrap and then move to another city because all the investors here have invested in my original company!

Be careful and make sure you don't have a non-compete with the first company; if you do, check whether it's enforceable in your state.

Sucks, dude.

If they fired him, that often renders agreements unenforceable, or at least difficult to enforce outside of rare circumstances. Even in states which otherwise recognize noncompetes, courts tend to be hostile towards companies that try to enforce them against employees where the company themselves terminated the relationship (though not all states are equally hostile).

For example, here is some pretty direct language from the Montana Supreme Court [1]:

We agree that an employer normally lacks a legitimate business interest in a covenant when it chooses to end the employment relationship. [...] An employer needs no covenant to protect its business in these circumstances as the employer sits in the best position to protect itself simply by maintaining the employment relationship.

[1] http://www.noncompetenews.com/file.axd?file=2011%2f12%2fWrig...

I've spoken to their lawyer and also got a second opinion. There wasn't a non-compete and both said I could start a similar company as long as I don't use any source code or other work created previously.

How have they done now that you've left?

Good at raising money from what I hear, not sure if they ever implemented anything innovative that a competitor isn't doing.

Where I get confused is the "if I want to keep my equity", and "kicked out with no equity"

Was this related to the vesting? If you had 10%, straight up, they can't decide that you don't have it any more..

I mean, I suppose they could dilute shares when doing another round, but if they just diluted to get you out, you may want to see a lawyer.

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