UpDown
UpDown’s Equity Split
At the onset of the venture you and Georg Ludviksson each agreed to invest $5,000 in seed capital to launch the venture, but you had trouble defining your roles because of the overlap in experience. However, the perception was that you would secure the investment, and Georg would manage the product. Eventually you realized that you would require the assistance of a chief technology officer, which lead to partnering with Phuc Truong. According to the original formalized one-page agreement Georg Ludviksson, Phuc Truong, and you (Michael Reich) would be equal partners, except that you would get approximately five percent more equity for starting the idea. After securing a $270,000 investment from angel investor Joachim Schoss, there was increased enthusiasm amongst the team. However, at the beginning of February the team’s progress was not meeting your expectations and you felt that your cofounders were not providing an equal contribution. With the angel round of investment becoming probable you have decided to engage a lawyer to incorporate UpDown and legally document the equity split. Additionally you have considered proposing a revised equity split that would give you an additional nine percentage points. You should not attempt to renegotiate the Equity split contract for UpDown because Georg and Phuc have significant alternatives and potential psychological and interpersonal barriers.
The Risk of Renegotiation
Georg and Phuc have both participated in startups, which have successfully launched products. However, each venture had issues involving the equity split. With these prior experiences on their minds they will be suspicious of any alteration to the equity split that you may attempt. Futhermore, Georg and Phuc have significant alternatives to participating in UpDown. Phuc has received programming contracts for as much as $200,000 a year and one such project was developing a site for the largest real-estate company in New England. He
At the onset of the venture you and Georg Ludviksson each agreed to invest $5,000 in seed capital to launch the venture, but you had trouble defining your roles because of the overlap in experience. However, the perception was that you would secure the investment, and Georg would manage the product. Eventually you realized that you would require the assistance of a chief technology officer, which lead to partnering with Phuc Truong. According to the original formalized one-page agreement Georg Ludviksson, Phuc Truong, and you (Michael Reich) would be equal partners, except that you would get approximately five percent more equity for starting the idea. After securing a $270,000 investment from angel investor Joachim Schoss, there was increased enthusiasm amongst the team. However, at the beginning of February the team’s progress was not meeting your expectations and you felt that your cofounders were not providing an equal contribution. With the angel round of investment becoming probable you have decided to engage a lawyer to incorporate UpDown and legally document the equity split. Additionally you have considered proposing a revised equity split that would give you an additional nine percentage points. You should not attempt to renegotiate the Equity split contract for UpDown because Georg and Phuc have significant alternatives and potential psychological and interpersonal barriers.
The Risk of Renegotiation
Georg and Phuc have both participated in startups, which have successfully launched products. However, each venture had issues involving the equity split. With these prior experiences on their minds they will be suspicious of any alteration to the equity split that you may attempt. Futhermore, Georg and Phuc have significant alternatives to participating in UpDown. Phuc has received programming contracts for as much as $200,000 a year and one such project was developing a site for the largest real-estate company in New England. He