Advice needed: not moving forward with co-founder, how to structure alternate deal

This is really tough. The first question would be, can you join any sales/demo calls with these "irons in the fire" so that you can form a relationship with these prospects independently of his relationship? It would be normal anyway for him to loop you into this.Honestly, I'd say you should have the conversation with him as soon as possible and see what he proposes. I think it's highly likely you could lose these sales leads, but you should find out what he actually wants and see if it's possible do to that.You can think about it relative to what "market" would be. Usually the 20% equity would be under a 4-year vesting period with a 1-year cliff. Can you look at the time period it will take him to close on these deals, and offer him the equity amount relative to that without requiring the 1-year period to the cliff? (e.g., if it takes him 3 months, then 3/48 months would be equivalent to 1.25% of the equity)Or can you afford to retroactively pay him a cash salary when he closes on these deals, or simply pay him a cash commission on the deals he closes.Finally, is there any possibility that having a conversation like this might lead him to adjust his attitude or work style with you? Perhaps you can talk, come up with the termination agreement that both sides think is reasonable, and then proceed on a trial basis with a scheduled check-in to see if it gets any better?Apologies. This is all around a tricky situation!
JennyPIN's profile thumbnail
Thanks for all your thoughtful feedback. I do believe in having the conversations sooner rather than later. That is my plan and I just wanted to get some thoughtful insights. I already know we can't work together. He's generally condescending in all communications with me. Even if it's just his style, he won't change it and I won't overlook it. He's been quite reticent to share any info on the contacts. One is with a company with 12k employees listed on LinkedIn and he tried not to share the first name of his contact (It was Mike... good luck hunting him down, lol). Obviously once I have the convo, that could all change. I like the idea of erasing a cliff and giving him X% equity based on time, maybe even with a bonus bump.Thank you again!Jenny
Yeah, though be careful with the time-based thing, because based on what you said here about his reluctance to loop you in, he might drag it out. Maybe you say X% if you close abc deal(s) by xyz date.It could also make a difference from his perspective if he is doing this full-time right now (i.e. forgoing income) or if he has another primary source of income and this is just a side hustle for him until it picks up steam.That is so SO weird that he's being evasive about the name of his contact. It's hard to tell if he's being territorial or if the lead just isn't qualified/interested.It sounds like you have a good handle on the situation regardless. Good luck!
ShanaThomas's profile thumbnail
Hi @JennyPIN - I'm sorry to hear you're in this tough situation. I am an Associate at LVLUP Legal, a women-owned law firm focused on business and IP law for startups, founders, and digital brands. We specialize in all things "startup law," from drafting contracts, partnership, and investment agreements, to protecting intellectual property. I am more than happy to set up a free consultation to strategize and discuss this more from a legal perspective. Please feel free to reach out at shana@lvluplegal.com or book a time to connect via the link below:https://calendly.com/shana-thomas/30-min-discovery-call?month=2021-11 Shana
JennyPIN's profile thumbnail
Thank you, Shana. I appreciate your offer. We do have legal counsel I've spoken to. However, I'm not concerned from a legal perspective right now. We don't have any formal agreement and he's technically under a non-compete, which I've used as a reason not to move forward more formally yet.
JennyPIN's profile thumbnail
Hi Shana,I just booked a time with you. I do have a couple questions and our attorney isn't as focused on "startup law" so I appreciate the consult. Talk to you tomorrow!Jenny
DianePrince's profile thumbnail
Hi, Jenny! I agree about having the conversation soon. Question: if one of those deals close, will that mean cash for the company? I would not give this guy equity -- that will tie you to him and could be a nightmare down the road. I'd rather give him a super generous cash bonus if the deals close. With people like this, I've found it works when they come up with the solution. I'd be clear and direct about the partnership not working out and ask him about his ideas for compensation to close those deals.Then I'd get a legal document drawn up that protects him so he knows he'll be well compensated and that also allows you to be involved in his conversations. Feel free to call me if you want to talk it through!
JennyPIN's profile thumbnail
Thanks, Diane!
I totally agree with this!