I run a music production site to help music producers. The site currently includes a free download library of music production tools, as well as interviews, tutorials, and music production news.
The site has earned almost no money when I operated it, and all social media are the 3 years of its existence. My plan was to build an audience before I started selling to them. That's why I did not want to make any money.
I met my co-founder and we went to build a business and planned for a year. Right now, we're getting a web developer to create a marketplace that will integrate with what I've already created on the site.
Now we have reached the point where we are working on a founders agreement and a stock split. (yes, that should have been done earlier)
Important factor to consider
- We are both financially unstable. My co-founder, however, is financially more unstable than me and has a hard time paying his bills.
My relationship with the cofounder
- When I networked for my website, I met my co-founder
- For a year he helped me with ideas on how to increase the audience of the site and build my Facebook group without asking for anything
- One year after I met him, I hired him to build the brand identity for $ 700 because he already had some experience working on brand identities.
- He worked on the brand identity, which eventually led us to work together to build a business.
- In addition to the $ 700, I started paying him monthly one month after the $ 700 payment for helping him build the business. I paid him $ 300 a month for five months and paid him $ 140 a month for four months
- We've come to the point where we've created the business plan, website models, specifications and requirements to build the market
- During this time we have not talked about a start-up agreement, and we are currently trying to work out an agreement and especially the stock split.
- Came up with business idea
- Creates Mockups & Specs & Requirements for the website
- Create a logo, a slogan, a brand story and a brand meaning. (He did not do everything he promised for the brand identity because he wanted to wait until the site was created.)
- Found web developer we currently use to create the site.
- Has experience in brand identity, graphic design and a little entrepreneurial experience.
- I founded the website and ran it alone for 3 years
- Website created
- Grew community (social media followers, email list, monthly website visitors)
- Entertain the community every day
- Did my co-founder spend $ 2,800 last year to help me build the business
- The $ 15,000 spent on the project did not include the money sent to the co-founder. The co-founder contributed $ 0 to the company and, due to his financial situation, does not plan to donate to the company out of pocket.
- Creates the business plan
- I have more experience in the music industry than my co-founder, but no experience in entrepreneurship, except for the three years I've spent the site and the community.
- We both plan to be in the long term with this business. (We may change our mind in the future, but we are not planning to build the business for now and sell it as soon as possible.)
- The job distribution for running the business is fairly evenly divided.
- During the time that my co-founder was paid by me to build the company, he had many problems with his life situation and his daily life because of his financial situation. Everything he created (models, logo, brand identity, etc.) to build the business was never on time. His personal financial situation has kept him from consistently investing time on this project.
- In the year we worked on building the business, I just maintained the community and did not try to expand it.
- The strength of my co-founder is his ideas. However, I'm still not sure if his ideas will be realized.
- He's also a graphic artist, but I'm skeptical about his abilities because he did not have many examples of his work and the ones he showed me were not very good. For a decade he has stopped working as a graphic designer.
- I trust my co-founder, but I am not sure that he can do the work required to succeed.
- When I first hired my potential co-founder, I thought of him as an employee. I hired him because of his good ideas, we got along well, I knew about his financial situation, his previous work experience and I knew that I could hire him for a job I definitely could not do and that he could do better very low price. Several months after I started paying my potential co-founder on a monthly basis, we discussed sharing the shares and my willingness to give him some justice based on his ideas and leadership. When he worked for me, he had the idea that he would get justice, which I still absolutely think he deserves. He feels that he deserves considerable justice because he worked for a very low wage and has skills that I do not understand.
So the question is how high should our stock split be in the company.
In my opinion, I should get a bigger share of the equity. (I know, shocker)
I thought 65% for myself and 35% for my co-founder.
I recently had a conversation with him and offered him 30%, but he said it was too low and he wanted 45%.
I founded the website and the community and laid the foundation for 3 years. My co-founder was hardly involved. (Help with ideas and a bit of community building in the Facebook group)
My co-founder came up with the business idea, created the models and specifications and requirements.
He contributed $ 0 to the project. I paid for everything.
When we open the marketplace, we will start with a community and a foundation that I have laid in the last 3 years.
I would like to hear your honest opinion on an approximate stock split based on the information I provide.
Thank you for taking the time to read this post and comment!
I know it was a long one, so I really appreciate it!