Team dynamics after pre-$eed

[tedthayer]

5 months ago, I joined a technology startup aiming to revolutionize mobile healthcare. The founder ran a lab and the cofounder was a doctor with impressive credentials. The vision was big and I quit my job to work for no pay without a formalized position. We converted the founder's basement into an office, got an interview with YC, and few $100K investment and few $M pre-money valuation from 500 Startups. From the outside, we're rockin' & rollin'

As can be expected, internally things are much less smooth. I am the only full-time person (85+ hours/wk), the doctor cofounder doesn't really participating (~5 hrs/wk, 6% equity) and the main founder is scattered between his lab & another company (>60%). He's great at selling the vision and getting ppl pumped up, but is not present much for day-to-day tasks like customer discovery, product development, pitch materials etc. He just offered me 0.5% for my contribution over the last 5 months and the title of COO & 1st employee (previously PM).

I have a feeling that this dynamic is not right. My last startup disbanded after we couldn't resolve the unequal contribution problem, and I don't want to repeat that mistake. Of course, I should have gotten equity in writing sooner- but that issue might be rooted in a deeper problem. I feel like a solopreneur most of the time, doing most of the heavy lifting to build the care of the company, not like a first employee with little impact on the company. If I leave, progress will nearly come to a halt. I want to stay, but I'm concerned about this dynamic.

Do any of you have a similar experience or can offer some advice as to what I should do in this situation? Thanks so much in advance! :D

[verdverm]

Your equity shares should be much more equal. You should have had legal docs in place, been getting paid.

My experience has been people from the professional services (docs, lawyers, RE) have no clue about running companies or being fair to their partners. If they aren't helping, they aren't really partners. Ideas are worthless, execution is what counts. Does not sound like these folks are executing or going all in on their ideas.

Negotiate or run. They should be full time too, with equal equity, or give you the majority stake.

If they insist on their current terms, they will likely never succeed with anyone, so you should move on.

[tedthayer]

That's an interesting take, I do see some logic to getting such a significant stake- but I doubt that would be considered. A lot of the value they attribute to pending patents that have come out of the lab

[verdverm]

Patents are worthless unless you can execute on the business and can afford to police and prosecute said patents. Then someone comes around with an even better solution which they patent. They think patents (ideas) are worth money because they don't know better yet.

Don't undervalue your role in all this. I would leave of I were you, not worth the troubles. You will most definitely be happier working for someone else and also enjoy getting paid.

[tedthayer]

Yeah I see your point. When I work alongside the founder though it's awesome. We have similar values and will just basically work nonstop, like when we were getting the YC application ready. He is just a professor/lab director and CTO of another company so his focus is split until he leaves in ~6mo. I definitely see the potential in the technology, brand, him etc. But these are not small issues to ignore...

[icedchai]

Just tell the founder you're going to require more compensation to make this work. If you get a run around, walk.

[tedthayer]

Thanks, that was my response- we're setting up a meeting them & some advisors to go through what my results have been and whether that warrants additional compensation. What do you mean by "a run around"?

[icedchai]

Basically if they make excuses and are not willing to take any actual, definite action soon. "We'll look at this in a couple months." "We'll address this after you finish X." A smooth talker can stall for years.

[verdverm]

Like we are going to "evaluate progress to determine if more compensation is needed"

Any is more than zero, which is what it would have been if you were not there.