Ahh Craig, didn't know you're a product dev guy. And with the equity of 60-75% given away, that is more like a co-founder relationship. I've to say last year I was optimistically looking for a biz dev guy, and even though I've met a few, there are other complications like equity split, you loving the idea more than them or vice versa, not knowing the person well enough to see the cracks in working together. So the Silicon Valley formula of a techie and biz dev cofounder seem to only work out of necessity whereby the team that got together within a short period (say at Y-combinator) eventually came together during the tough times and build something people want quickly (or they split up when the time/runway is up). So good partnerships are carved out of hardships or long periods of time (e.g. childhood friends). It sounds too risky to give away so much because even in Shark Tank, max of 50% is given away and very rarely. Having said that, I've seen too many biz devs' idea die out because they're too afraid to give out generous equity. But that is another topic for another day!
I'm a product dev guy too and I realised that what biz devs believe you can't do, you can actually learn. Conversely, it is harder for a biz dev guy to learn product dev which encompasses design, architecting and engineering. I've just met up a potential strategic business partner for coffee last Saturday and there was no equity talk. Just friendly chat and see how we can help each other's business and if we could align together. I got good after doing it a few times because if you're a product dev guy, there is a likelihood that you don't come across to salesy and polished. That actually becomes your strength because of your ability to stay introverted and connect with people genuinely through casual conversations. One thing I noticed though in social events, you can't talk to everyone so you have to focus on the few you connected with and have quality conversations. On Tuesday, February 26, 2013 7:18:55 PM UTC+11, Craig Stump wrote: > > Thanks hoops and simran - very helpful info. I said no. There were too > many things that set off alarms bells (including the split). I've decided > to do the hard yards myself and have started doing the numbers & sales > (which has also been the consensus after speaking to heaps of people that > have done this stuff before). Being your typical introverted developer, it > certainly isn't coming naturally, but it's something I've always wanted do. > > Thanks again for your helpful advice - much appreciated. > > Craig > > > On Sunday, 24 February 2013 13:24:27 UTC+11, hoops wrote: >> >> Congratulations, you are now facing what maybe your first big test as an >> Entrepreneur - when to say no. (and say it more like F off). >> >> Run fast. >> >> What they are doing is seeing if you are an easy mark - you are a solo >> shop, no cash, you product could be nice, you may have started to get some >> traction so the idea is proving itself... why not do that. >> >> it may sound like an easy path, but it is one of pain. >> >> (here is a good article : >> http://www.davidgcohen.com/2011/04/25/clarifying-beware-of-angel-investors-who-arent/) >> * >> * >> This offer is really about "control" of your business and IP. Any decent >> investor will have connections, or they are not an investor. >> Even if you continue to deal with these people, what they will do is: >> a) control you spending - they will approve all spending >> b) will most likely be a back seat CEO >> c) use you for "gig flow" ie. bill you cash for everything - and try and >> accrue ie. so that if you can't pay get equity very cheap. >> >> What to do ? >> a) what is your valuation for the business ? >> b) get off your butt and do some leg work - the reason you are even >> thinking about giving them 60-75% is that it may look too hard. Here is >> the truth - raising finance isn't as easy as techcrunch says. you have to >> start networking ? do you have all your slides together ? have you got a >> pitch down ? ie. when raising capital its about your market - what is it, >> how big it is, how are you going to reach it, what is your position in the >> market, what's you special thing. You then need number's that back this >> up. Get out there . You learn so much about you business just doing this. >> ie. if you don't know the answer - ask the person - "what would you like to >> see, and why". This will give you feedback on areas you are not >> communicating about. >> c) talk to larger companies that are in your space - they may have >> partnership programs that can open doors and or deal flow ? They may even >> be interested in investing. >> >> You need to build competitive tension. >> >> This may sound harsh, but please don't take it that way (you are about to >> go to the next level, and it is going to push you as a person) - you need a >> clear goal of why you are doing this, WHO you are going to be in the >> company - include that in any presentation (don't justify it, just say >> it). Then build your deals around that. And don't be afraid to tell >> aholes to piss off. Life's to short and doing a startup is a lot of hard >> work. There are great investors out there, it is now your job to find >> them and communicate to them the value of your opportunity. Its actually a >> lot of fun. >> >> >> >> On Thursday, January 31, 2013 11:59:40 AM UTC+10, Craig Stump wrote: >>> >>> Hi everyone, >>> >>> I've built a web-based product that's about 90% done, which has taken me >>> about a year to get it to this point (bootstrapped). I'm talking to some >>> potential investors who could take my product global, and possibly bring in >>> 10x more revenue than I could by myself locally. They're being cagey about >>> their $$ investment, mainly promoting their global >>> connections/relationships. While I have no doubt they could pull off what >>> they say, they want somewhere between 60-75% ownership. >>> >>> Is that normal? >> >> -- -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. Vist http://siliconbeachaustralia.org for more Forum rules 1) No lurkers! 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