A Made Up Story
Jan 2015: Chris is a senior in college, and has a great idea for a product, and spends senior year (spring term) working many hours refining the idea into a mockup. Senioritis, you know? Many discussions with other students improves and refines the idea.
October 2015: Chris’ friend Dana is interested in helping on the product. It turns out that Dana has experience from courses and also hacking on the side, and knows just how to build a working prototype.
It becomes a practically full time obsession for the two of them, and together Chris and Dana continue to refine the project and get feedback. During the summer and fall, Dana writes a lot of software, which is a central part of the project.
August 2016: Dana and Chris realize that they have a knowledge gap. Chris is the product visionary with strong technical chops. Dana is the hands-on coder and has developed a majority of the code.
However to be able to pay the bills they decide that they need to raise money and to have more business expertise. They have no clue how to do this, but a friend of a friend introduces them to Alex. They really hit it off with Alex, who is very experienced, has been involved in a startup before and knows several angels very well.
Questions to discuss with students near you. There are no correct answers. Imagine yourself in the actual situation and ask yourself what your position would be and how you would defend it:
- When do you think is the right time to start thinking about incorporating, realistically, and why?
- When do you think the three individuals should assign a ‘title’ to themselves
- what titles would you suggest, and why?
- Who do you think may legitimately call themselves a “founder”, a “co-founder”, or just an “early member of the team” and why?
- What is a fair way to allot ‘ownership’ to the three individuals and why?