Collaborating can be a great thing—both in business and your personal life. I founded Due.com with my friend and colleague, Murray Newlands, and you’ll find a number of successful co-founder stories in Silicon Valley and beyond. Startups are known for bootstrapping but what happens when one co-founder is severely more financially well off than the other? That’s what Verge wanted to find out, asking a number of startup founders including myself what our strategy was.
For me, it was balancing equity that leveled the playing field. When you balance both cash and equity that feeds the business, you stay full partners. For example, if one co-founder is putting in more time than the other, but the other partner can contribute more money, you can strike a balance. If one co-founder can simply supply more, they get a bigger slice of the equity. I like the Paul Graham equation of 1/(1-n) to make bootstrapping a little easier.
Other founders suggest getting all agreements in writing and creating a spreadsheet together to keep both partners on the same page. You might want to “think in opposite directions” to strike a balance, or hire a lawyer as a third party.
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