I manage a music production site to help music producers. The site currently contains a downloadable library of music production tools, as well as interviews, tutorials and news about music production.
The site was generating almost no money when I ran it and all the social media accounts for the 3 years of its existence. My plan was to create an audience before starting to sell, which is why I was not trying to make money.
I met my co-founder and we moved on to setting up a business and planned for a year. At this time, we are asking a web developer to create a market that will be integrated with what I have already created with the website.
We are now at the point where we are working on a founding agreement and a split of equity. (yes, it should have been done sooner)
Important factor to consider
- We are both financially unstable. However, my co-founder is more financially unstable than me and has trouble paying bills.
My relationship with the co-founder
- When I was networking for my website, I met my co-founder
- For a year, he helped me with potential ideas on growing the audience of the website and helped to create my Facebook group without asking anything in return. R
- A year after I met him, I hired him to build the brand identity priced at $ 700 because he had already worked on brand identities.
- He worked on the brand identity, which eventually led us to collaborate on the creation of a company.
- In addition to the $ 700, I started paying him a month after paying $ 700 for his help in setting up the business. I paid him $ 300 a month for 5 months and paid him $ 140 a month for 4 months.
- We are now at the stage where we have prepared the business plan, the mock-ups of the website, the specifications and the requirements, and we are building the market.
- Throughout this time, we have not discussed a founders' agreement and we are trying to develop an agreement and, above all, to split the share capital.
- Came up with business idea
- Created Mock-ups & Specifications & Requirements for the Website
- Creation of the logo, slogan, brand history and brand meaning (he did not finish all that he said he would like for the ######################################################### 39; brand identity because he said that he wanted to wait for the website to be built)
- Web developer detected that we are currently using to create the website.
- Has an experience of brand identity, graphic design and a little entrepreneurial experience.
- Created the website and ran it by myself for 3 years
- Built site
- Grew community (following social media, email list, monthly visitors to the website)
- Maintains the community every day
- I have donated $ 2,800 to my co-founder over the past year to help me build the business
- Spent $ 15,000 for the project not including the money sent to the co-founder. The co-founder has donated $ 0 to this business and does not plan to contribute from his pocket due to his financial situation.
- Created the business plan
- I have more skills in the music industry than my co-founder, but I have no experience in entrepreneurship, with the exception of the three years spent managing the website and the community.
- We both intend to work for this company in the long run. (We may change our minds in the future, but for now, we do not intend to start the business and then sell it as soon as possible)
- The distribution of jobs for the management of the company is practically divided.
- Since my co-founder was paid by me to help develop the business, he has had a lot of problems with his life situation and lives every day because of his financial situation. Everything he had created (mockups, logo, brand identity, etc.) to create his business was never at the time. His personal financial situation prevents him from devoting a constant time to this project.
- The year we were working on business creation, I just kept the community and I was not trying to expand it.
- The strength of my co-founders are his ideas. I am still not sure of the execution of his ideas.
- He is also a graphic designer, but I am skeptical as to his ability to do this because he did not have many examples of his work and those that he has shown to me n & # 39; They were not very good. He has not worked professionally as a graphic designer for a decade.
- I trust my co-founder, but I'm not sure that he is able to do the work required for him to succeed.
- When I hired my potential co-founder for the first time, I simply considered him an employee. I hired him for his good ideas, we communicated well, I knew his financial situation, his previous work experience and I knew that I could hire him for a job that I absolutely could not do and where he could do better. a very low price. A few months after starting to pay my potential co-founder every month, we discussed stock splitting and my willingness to give him some equity because of his ideas and his leadership. So while he was working for me, he had the idea of getting a fairness, which I absolutely think he still deserves. He feels he deserves a lot of capital, because he works for a very low salary and he has skills that I do not know.
So the question is: what should be the distribution of our actions in society?
In my opinion, I should get a bigger share of the equity. (I know, shocker)
I thought about 65% for me and 35% for my co-founder.
I recently had a conversation with him and offered him 30%, but he said that it was too low and that he wanted 45%.
I founded the website and community and laid the groundwork for 3 years. My co-founder was not very involved in this project. (help with ideas and a small building of the community in the Facebook group)
My co – founder had the idea of company, created the models, the specifications and the requirements.
He contributed $ 0 to the project. I paid everything.
When we launch the market, we will start with a community and a foundation that I have established over the last 3 years.
I would like to know your honest opinion on an approximate breakdown of equity based on the information I have provided.
Thank you for taking the time to read this post and comment!
I know it was quite long, so I really appreciate it!