Partnership agreements · Business planning

I have a potential cofounder - how do we include a different vision?

Rand Strauss

September 20th, 2015

Sorry for the long story:

PeopleCount.org has a mission, involving feature set A and B, giving political power back to The People. (I know it's hard to believe- but suspend disbelief for a moment- we have a solid plan, plus a solid distribution plan, including a bit of market validation. PeopleCount is a CA Benefit corp currently. Going non-profit is an option if that's where funding comes from.)

I'm a back-end software engr (for 30+ years) working full-time on the marketing, and a friend of mine, a back-end architect, is available to help full-time for 6-weeks then part-time (unless we find funding).

Alex (full time, project mgmt & web UI skills) brings his friend (10hr/wk) and his team of 2 10-15 hour/week developers (front-end and full-stack). They're all 20-23 year old students. Alex is also an excellent networker - much better than I am.

They have a different vision. They want to use feature set A for all sorts of subjects. If done well, it could be big and could fit in well with our mission- helping educate people, getting them to participate, plus feeding the pipeline of issues on PeopleCount. They see the value in all the marketing I've done, as well as how PeopleCount has a great chance of working, involving them in a successful, very high-profile effort. Plus they value our expertise.

Clearly, we need to focus on PeopleCount's mission at least for 14 months (thru the election), and longer. I believe PeopleCount's mission must be our mission- clear and focused. This will be crucial for funders. 

Alex is worried that his mission will be lost, so he wants some sort of guarantee. What kind of guarantee can I give?

I'm willing to say that he can start his project after the election, and give him a written guarantee that if he can't, he can take a copy of the software when he leaves as long as he doesn't compete in politics. But he wants to have some kind of independent company that PeopleCount does business with, so they'll naturally have rights to both the software and the database of customers.

Having 2 entities seems overly complex. Wouldn't it be off-putting to investors?

I feel sort of silly in indulging him, and I'll look for another front-end person. But he's been very resourceful and his team would be an asset, though more so if I can secure funding (small chance) so they can work full time. Advice?

Mark Talaba Founder, Vision Former, serial entrepreneur

September 20th, 2015

Hi Rand. Seems fair to say that your vision is to to create an application/solution, and Alex wants to create an application platform. Yes? Quick thoughts: 1. A platform needs a visionary user with a real business. Your company would, in effect, be that customer, so there’s a strong reason to collaborate in the way that you initially suggest. 2. You are correct to ask for Alex & team to first complete your application. It will be good for several reasons #’s 1 & 2 above, for starters. Also, - the iterative development & testing that your build-out will require will also produce a better platform (assuming that the builders are approaching the project from a platform-creation perspective) - building a platform without a solution is a very long way around to getting to market. 3. Marketing and selling a tech platform is wildly different from selling (monetizing) a business solution. So having two different businesses is not overly complex. It may be the only sensible way to go. 4. An attorney with deep experience in software licensing and related business matters could guide you toward a working relationship (and business relationship) that appropriately values the contributions of each ‘half’ of the business. I’ve worked with one - totally reliable, reasonable, efficient & effective - for 20 years, Fred Wilf (fred@wilftek.com ) 5. Over time, if successful, the relationship between the two related organizations would change, and perhaps a settlement would need to be reached. If so, the best possible thing to have is a well-constructed agreement in place at the start. 6. If constructing a reasonable agreement starts generating a lot of discord, then you can be sure that the working relationship would sooner or later run aground. Best of luck. Mark

Anonymous

September 20th, 2015

Thanks much! It's resolved. He was being counseled to get a better deal in case we fail. So it looks like we can come to an easy agreement by setting the terms for both cases. Thanks!

And thanks for the luck. So far, one cause with a half million members is interested in using our proposed site, and we're working on two others of the same size. One challenger in a high-profile congressional race is interested and we should be talking to another in the next month. A foreign democracy has asked for a promise to share the technology with them (or serve them). One international group and a group at the U.N. are also watching us. Unlike 4 weeks ago, tomorrow I'll have 2 other people working on it full-time (tho' one just for 6 weeks w/o funding) and 2 more half time.

We would just have a much better chance of making an impact in the next election with funding (and a marketing person). If you have ideas or connections for me, please pass them along. Anything at PeopleCount.org gets to me, or see my contact info on the website. We're even willing to take it non-profit if that's what's needed to succeed... Thanks!

Nigel Choi Co-Founder at Kipu Lab Inc.

September 20th, 2015

From what I read it seems that Alex's behavior is a huge red flag. His insisting on taking your idea and make it his own, than wanting some sort of guarantee that it will be carried out and even spinning out a separate company, tells me that he doesn't really "get" how startups work. How does he know his idea is even viable? Has he tested his platform idea? I think it's your job as the visionary to convince him your cause is worthwhile. If he still isn't convinced and wants his way, than there's really no good fit here. Creative corporate structuring is only going to add to the mess.

Now, it doesn't mean you shouldn't listen to him at all. If there are differences in vision, you should hash it out now rather than agree to some sort of guarantee and kick the can down the road. What's the motivation behind the difference in vision? Is he just trying to help, saw a hole in your strategy, and proposed something better? Or is this some sort of a power struggle? If it's the former, you should listen. If it's the latter, it's time to split.

Tactically, if he is already officially an employee or contractor, and I assume you did all the paperwork right, including confidentiality agreement, he cannot do anything with your idea if you somehow split. It's your baby after all.