Should I go halfers with friend on website idea?

No_hassle

Hi all - I have an idea for a website that I think could be popular. My friend is keen on the idea as well and wants to get involved..we had discussed working on stuff together before. I'm just wondering what way we should split it...I had the idea and I'm a developer so I will be building the site and doing all the work. My friend isn't technical and doesn't have any relevant skills i.e. online marketing etc, so I'm not sure what his contribution will be. Also he's based in Cork so wouldn't be around that much.

The only reason I would want to go in with someone is just to have a second person there for backup, encouragement etc as working solo on a project can be tough if there's no one there to bounce stuff off. So what are people's opinions on this...should I split 50/50 with him, just do it myself, split something like 75/25? Anyone that has similar experience workin in a venture with a friend or friends I'd be eager to hear how it turned out, if it was a good idea to get friends involved, etc

TIA

3DataModem

Not 50/50.

80/20 after costs.

PS your time is a cost.

STBR

To be honest it seems like it would be best to partner with another dev.

Or at least somebody with great business skills.

Then you can bounce all you want off them, get more accurate feedback, and have them do 50% [or however much] of the work as well.

Seems harsh but you're much more likely to succeed.

CompanyBureau

Doesn't sound like a fair partnership to me - Sounds like your bringing a lot more to the table. I would partner with someone else who is bringing funding or some expertise to the business, and is willing to put the hours in. I'm gusessing this is what your gut feeling is telling you anyway.. Go with the gut

unnameduser

It sounds like your friend does not have much to offer on this project.
Partnerships do work but it depends on who you are partnering with. He may be a mate but working with mates is not always a great idea.

From the sounds of things you might be better to go solo on this project or involve another developer.

AndyJB

Morning,
Don’t forget it’s business and you should get a “Business Partner” that will bring positive strengths to the party.

I’m sure your buddy is sound but please do take a critical and hard look at what you want to achieve. What does your business need to get some traction? Sales, Customer facing, technologist services, people/person onboard to help you reach the goals you have.

My friend isn't technical and doesn't have any relevant skills i.e. online marketing etc, so I'm not sure what his contribution will be. Also he's based in Cork so wouldn't be around that much.

So what does he offer to the mix that’ll help you achieve the goals? I appreciate you’re in a tricky situation, your Buddy or your business? Is he offering to put cash into the venture?

This may sound harsh to you now, but if you offer him a percentage of any sort for free there’ll be a high potential for future tension. When you’re still doing all the work in 12 months or 5 years and he’s just sitting on the free share holding waiting for you to crack the world that’s a ticking time bomb you don’t need. Giving something away for nothing is never a good thing. I’m stating the obvious, but the recipient never really appreciates the gift unless it’s earned.

There are plenty of avenues open to you. Have you an accountant? Talk to them, they may have other clients looking for investments. Pay some First Tuesday (http://firsttuesday.ie/) events a visit and see what other people are doing in your predicament.

Have you a plan in place? Potential investors will want to see a business plan with numbers. It doesn’t have to be “Ulysses” but must contain all the facts and projections. Who you are, where you come from and where you’re going with the business. So you have a road map make sure you put one together, also put a cash flow projection together in excel so you have a handle on the cash needed.

Talk to FAS about “start your own business” courses. Talk to Dublin City Enterprise Board (www.dceb.ie).

Taking 5 mins or 5 hours out now to make the important/hard decisions could save you months or even years of grief later.

Finally, to help with the buddy or business prob. Put a check list together of what you need for the business e.g. Sales person, techie, someone to answer the phone, office space, desks, pcs (list is endless). Now put a list of what your buddy can do for you. Allow a complete match of his skills and your wish list to get a 25% stake in the business. Where your tasks are missing from his skill list drop a few percentage points for each missing task.

Hope this helps!

Best of luck with the venture.

badboyblast

Good idea, I`m also looking for a partner to set up some guides for restuarants , clubs , pubs etc - great domains available

No_hassle

AndyJB wrote: »

So what does he offer to the mix that’ll help you achieve the goals? I appreciate you’re in a tricky situation, your Buddy or your business? Is he offering to put cash into the venture?

Thanks for the reply some good detail there. My friend is enthusiastic and a good person to bounce ideas off...the idea is fairly complex and there are different scenarios that need thrashing out, so it's a lot easier to have another brain involved which is probably the main reason for having him on board. It looks like he will be available towards the end of the year to work on this and he said he's keen to do so. One thing I'm not good at is online marketing, google adwords/adsense, sales etc, so I could hand all that stuff to him. When I say he's not technical I mean he's not a developer, but he is fairly savvy when it comes to the web and other stuff such as iPhones etc, so I'm sure he'd be able for the marketing side of things. He hasn't offered to put any cash in, at least not yet at any rate.

AndyJB wrote: »

Have you a plan in place?

No plan so far...the only costs I see at this stage are my time in developing the site. I don't see there being huge startup costs as it's an online only venture, and I don't see the need for funding at least not at this stage.

Thanks again.

AndyJB

No_hassle wrote: »

Thanks for the reply some good detail there. My friend is enthusiastic and a good person to bounce ideas off...the idea is fairly complex and there are different scenarios that need thrashing out, so it's a lot easier to have another brain involved which is probably the main reason for having him on board. It looks like he will be available towards the end of the year to work on this and he said he's keen to do so. One thing I'm not good at is online marketing, google adwords/adsense, sales etc, so I could hand all that stuff to him. When I say he's not technical I mean he's not a developer, but he is fairly savvy when it comes to the web and other stuff such as iPhones etc, so I'm sure he'd be able for the marketing side of things. He hasn't offered to put any cash in, at least not yet at any rate.


No plan so far...the only costs I see at this stage are my time in developing the site. I don't see there being huge startup costs as it's an online only venture, and I don't see the need for funding at least not at this stage.

Thanks again.

Hi,
There are costs. The ESB needed to run your PC, broadband fees, hosting costs etc etc etc. Very importantly how will you keep bread on the table while you're getting things off the ground? Google ads and even the most rudimental marketing will have some cost associated with it.

It looks like he will be available towards the end of the year to work on this and he said he's keen to do so.

Year end is 6 months away. If you have a good business plan in place he might join you sooner, this would move the project on sooner.

Sorry to go on about it. Do put a plan together, even on a napkin would be better than nothing.

You don't mention what trading entity you propose to setup i.e Limited co, sole trader or simple partnership.

Either way, when/if you hand over shares to the buddy make sure you also have a share holders agreement (SHA) in place at the same time.

It should cover....

1) Sale of business in future.
2) Disposal of shares held. Can they be sold to anyone or only to the business or existing shareholders?
3) Voting rights.
4) Tax status of individuals involved i.e. each pays their own tax bill.
5) What happens in event of unresolved disputes between share holders.
6) What happens to share holdings when new stakeholders get involved.

SHA list can be endless but I hope you get the idea.

Best of luck