[brudgers]

So here's the question: would you bring in a 50-50 partner (both of you on a vesting schedule) in order to scale and not merely grow? That is, would you give someone half the company to triple customers in a year...or something like that?

The last seven years is sunk cost and the only effect it can have on the future of the company besides providing a knowledge base is psychological drag. And bringing in a partner with large equity is exactly what taking VC is anyway..except that VC will make decisions based upon distribution of risk while a 5050 partner will have a similar concentration of risk to yours.

Overcoming the sunk cost mindset is tough. Just giving someone half a company you spent seven years building sounds crazy. But the seven years you spent getting to this point are irrelevant to VC decision-making. All that matters is going forward. Any different orientation on your part creates an impedence of expectations.

Good luck.

[davidfm]

Thanks for that. Interesting. Would I give up 50%? Yes - for the right return. I know I can do much, much better than triple customers if I can leave the technical debt to someone trustworthy. I accept that the last seven years is sunk cost. But I have seven years of amazing customer relations - a network that will flourish into $$$ when I have the opportunity to scale. I also have a product. Maybe not the perfectly polished product that developers better than me can make it, but <bias>It's Already Good</bias> and it will only get better. At this stage, giving (say) 50% to a VC and using that to buy staff (and ideally get accelerated growth via the VC's network) or giving that percentage to a partner who will concentrate to the same degree doesn't phase me. In my mind, they are each 50% of different values. The VC's investment immediately values the business greater than it currently is. The right partner does the same. I'm open to both routes. My problem is getting from here to either of those positions without killing the business whilst focussing on it.

Edit: just looked at your blog - my system mails checks and takes just a little of that back every month :-)

[brudgers]

I used triple just because it's a low but obvious payoff for 50% equity.

The immediate problem is not lack of money but lack of staff. Taking VC means turning up the heat on the lack of staff problem, and more money does not identify the right technical candidate, and in my mind at least, you really need a technical candidate who is partner grade and partner committed. Someone without the commitment can leave behind perfectly good code in an environment where those who remain were not close enough to its creation to quickly make sound modifications...imagining what a person without technical chops can leave behind in the code base is left as an exercise for the reader.

[Glad you enjoyed the blog.]

[davidfm]

OK, get your point on the multiple. Sorry, commenting on my business has me in defensive mode!

I recruited and retained several top level devs in my 10 years prior to going it alone. I'm not too worried about that bit. But thanks for making me think about what worked well in the process back then.

[brudgers]

I'm not just commenting on your business, but commenting on the internet...i.e. in near total ignorance. And not just that but telling you to give half of it away like I know what I'm talking about and you with a family.

Anyway, I was in the parking lot about an hour ago and thought the right developer might come in already knowing angels, vc's or 3F's.

[davidfm]

Thanks for the thoughts. Via another comment on here, I've made contact with a couple of developers on CoFoundersLab. Who knows, maybe one of them might be the right one. Cheers.