Ask HN: Who owns how much? | Hacker News Reader

Ask HN: Who owns how much?

4 pointss9ix6 comments

Are there any good resources or templates out there on how to create a good startup partnership agreement?

The general rule I've heard is: no matter what you do, you'll get it wrong. The only variable you can control is how wrong you are.

We're a team of 4, all working part-time, and getting ready to launch. A few other variables in the pipeline (people moving, marriage, etc.) but for the most part, something similar to four equal partners. Three technical, and one non-technical co-founder. SaaS.

Would love your thoughts and insights on how to be least wrong in creating this for the first time.

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Four equal partners is very similar to four equal partners.

Have a vesting schedule.

Have a buyout clause.

Use an attorney.

Get back to building.

I would like to second this response.

All extremely valuable to limit long term risk. Over time someone(s) will have to leave the group and having this ironed out up front saves a lot of time, effort, and money down the road.

One thing to consider is cash contributions (if any) that might alter the allotted equity. Other than that, equal partners with vesting is a good way to go.

Make cash contributions loans, not equity. The risks/reward of all the founders should be aligned, and aligned to working. The option of passive ownership is divisive.

At what interest rate? Seems to me the average startup's credit worthiness is somewhere between Junk and Non-Existant.

Interest rate is pretty much irrelevant. If the startup fails, they're not going to repay. If the startup succeeds then the interest is dwarfed by the value of the lender's equity.

If the lender is worried about interest rates and credit worthiness, they probably should not be pursuing a startup. The idea of a loan is that it removes negotiations over a finite pie that probably is worth nothing over the long run.

insights on how to be least wrong>

Even amongst the most honest, hard-working, and brotherly partners-- ugly disputes can happen. Worth bearing in mind, for your agreement, a smart shareholder clause to resolve disputes called the "Mexican Shootout".

Full description, read Felix Dennis, The Joys and Perils of Partnership, pg.175

http://www.amazon.com/How-Get-Rich-Greatest-Entrepreneurs/dp...

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