Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

Collecting equity after the fact?

A couple of months ago, I found a start-up with a hardware/software product geared to promising markets. They have recently split into two entities, each entity serving a different market but practically with very similar products. There are two young co-founders whom I got to know personally. I get along very well with the lead developer. My request to purchase equity/receive sweat equity was most likely rejected by the third founder who joined later, invested and received 15% equity. He has access to his wealthy family with significant manufacturing capacities in Asia. So, now they offered to me the distribution rights for North America. Even though it is certainly not my dream scenario, I do consider this offer.

3 Replies

Richard P. Ashton, CSO
1
0
Richard P. Ashton, CSO Entrepreneur
Sales Process | Operational Optimization
Negotiate an equity interest based on your perfromance (Sales or Revenue or Profits, etc). If you do not perform... the current owners are not obligated to transfering ownership to you as an equity partner. They should want you more motivated to perform with an equity clause (+ it's a way for the current owners to keep a good performer when you perform) and you can sell your motivation to perform for equity. No harm, no foul. Both parties should be open to this arrangement.
Roman Zrazhevskiy
0
0
Digital Marketer and Entrepreneur | Founder of Ready To Go Survival
It's difficult to give advice without more information. What's the product? How do they plan on distributing it? Is there any commitment from buyers before this hardware/software package goes into production? -- Roman Zrazhevskiy
Carl G. Lawson
0
0
Carl G. Lawson Entrepreneur
Founder at Model Kit Central
"Hardware/software" product sounds like it could be wearable tech or an automotive enhancement or ? (and 'Asia' in this case is probably China). In any case, I don't think the addition of the third founder would preclude them from adding you as a fourth, unless you have issues in working with the person they've added. Basically, if they're welcoming you to the party, you could also invest and focus on North America as a co-founder.
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?