This is a followup post of a previous one i did yesterday that is trying to look at the non-techie founder and techie co-founder relationship from the techies perspective...
I want to see what techies look for when deciding what they will accept when thinking about joining a non-techie founder who is getting going on their idea.
I am curious to know whether most tech people insists on being paid "something", or instead are happy to work at no cost; and if so then what level of equity do they ask for?
If someone came up to you and said "I have an amzing idea but am not technical and so need help building an MVP". Then would you say...
1. "great, I will do it for X% equity and don’t need paying a fee. lets get started". or
2. "great, but i need to charge an hourly or fixed rate, so lets talk fees (and maybe a smaller bit of equity)"
I imagine the answer is a bit of both. But more importantly, what is it that you look for in the founder and their idea to help you decide? What sort of interview questions do you ask of the founder and what kind of grilling do you give them?
Are they taken aback when you appear to turn the tables and ask them more deep dive questions about them and their experience than they do about you? Do they look threatened and a bit shocked that you aren’t in awe of their greatness at having a good idea?
and what if they are not great, apart from having a good idea. How do you broach that subject and what sort of response do you see?
lets say you think ”great idea but this founder hasn’t got a clue how to execute it”, do you tell them that? And if so and you then say “so i want at least 50% equity because i believe i can offer a lot more to get the MVP off the ground and to the first round of funding”, what kind of response do you see from the founder - utter shock at your greed, or a respectful understanding that you are contributing as much as them?
As an aspiring non-technical cofounder, I think having a technical cofounder is absolutely vital. You can hire a programmer if you have saving, but your employees will never be as passionate as you will be about your project, and lack of passion is not what you want in the second person of your company.
As equity goes, offering less than equal share to technical cofounders is insulting, and plenty of "idea people" try to offer off something in the range of 10%, with no salary to boot. Cofoundership is a partnership, and you two/few are about to put all your chips in to take on the world. If you're not respecting your cofounder as your peer, why should investors believe in your cofounder?
A non-technical cofounder should accept that their initial idea, as great as it may seem to themselves, will likely never make it to MVP without significant changes. Be willing to take criticism, suggestions, and be fluid on your vision. An idea is worthless without execution, and there are countless executions to bring an idea to the market. How you execute is what matters.
If I'm co-founding a startup, I only accept equity. Cash means I'm an employee, unless we both draw salaries. The question is how much equity.
What I look for is temperament and skills.
Is this person a hustler? Do they let their lack of skill or resource in an area stop them cold? Or do they figure out how to get the best possible result with what they have? Do they ruthlessly prioritize, and do they know when to quit on a specific tactic or strategy? Do they draw on every available resource (especially network)? Or do they try to do everything themselves?
Have they schooled themselves on contemporary startup practice? Do they think in terms of hypothesis? Or are they married to specific aspects of their vision?
If someone is not great, I leave. There's no point giving feedback because it's not near-term actionable. Much of the above is acquired by leading in a startup context. You don't just go off for 6 months and do that. It takes years. And running a startup, which is already incredibly risky, is not the place to develop these skills. Of course, it can't be avoided, as no one knows everything before they do it, but you want to minimize that.
@Matt Mansour - Spot on!
"If the non-technical cofounder has none of that in place than I am not sure what he or she is bringing to the table to justify an equity stake"
I love this - so in theory the person who came up with the idea and kick-started it, may not have any requisite skills to justify any equity at all! Of course no one is cruel enough to leave them with zero, but the concept is a very important one!
This is exactly what I have been trying to drive at.....
Just because Alexa has an initial idea, it means absolutely nothing, and Alexa is not the person who gets to hand out the share certificates and decide who gets what.
I look at what each co-founder is bringing to the table, excluding the idea, since the idea is worth very little by itself.
If there is no salary to start then none of the founders are bringing funding to the table. We are dividing sweat equity.
The technical co-founder has to deliver, maintain, enhance and scale a product. This person should also deliver technical tools that facilitate marketing and growth hacking, and deliver technology to help scale operations. If things go well down the road the technical co-founder needs to scale a tech team.
What I look for in a non-technical cofounder is the ability to bring a competitive advantage in marketing and sales. In other words they need to have at least one of the following in lieu of funding :
If a non-technical cofounder doesn't have one of the aforementioned assets, and is also not bringing funding, then I am not sure what he or she is bringing to the table to justify an equity stake. Perhaps the 6th item on the above list could be grit, if the grit yields value relatively fast.
Absolutely with you @Alyssa!!
if a non-techie founder thinks that a good tech co-founder is not needed ”because i can just go on Upwork and get a developer for £10/hour“ then run fast, away from them!
and if they think an MVP is just knocking up a few web pages to show potential investors - then run, run, run.
@Yi Li - cool response! Couldn't have put it better myself ;-)