software, partnership, co-founder, yc-how-to-start-a-startupThis is the scenario, I am a Full Stack Developer, always looking for interesting projects to fit in in my free time.
Then I get introduced to a Business Person, with 20 years of experience in his field, co-founder of a successful company in the US, then he wants to expand his company to Centro America, but as his partner doesn’t like the idea, he wants to take the adventure on his own and create a similar company to offer the service in other countries.
To do that, he needs to build the system from scratch, I told him I would build the whole system, but in exchange of 10% of the company.
Finally he agreed, but then he mentioned that the company will be based in Mexico which is better for tax reasons.. etc.
But then my concern is:
Thanks in advance.
The best way to go about it would be to ask a lawyer to draw up all the relevant paperwork. While registering a company, anywhere it may be, the person has the option to declare additional shareholders/partners (as long as it’s not a proprietary firm). If you have legal documents issued from the person starting the business stating that you own 10% of his business, I don’t believe that it should be a problem.
If anything goes wrong in the future, you’d have the option of taking him to court. The reason I stress on having a lawyer go through all the paperwork is to make sure that all the required paperwork is in order and the documents sent to you are real.
As far as claiming your 10% goes, that depends on various factors. Few options are as follows:
Run away and don’t look back! There are many risks in joining any start up and this one adds two severe complications that just aren’t worth the headache:
“he wants to expand his company to Centro America, but as his partner doesn’t like the idea, he wants to take the adventure on his own and create a similar company to offer the service in other countries”
This should ring alarm bells. Why doesn’t his partner want to do it? Maybe, because he thinks it is a bad idea. It also strikes me as odd that he is creating a second company to compete with a company he already owns. You generally aren’t allowed to do that.
“the company will be based in Mexico”
You are going to have a hard time finding a lawyer in the U.S. who knows Mexico corporate law. Even if you can read Spanish, Mexico has a very different legal system and you might not understand the ramifications of the contract. You may have to deal with complicated tax issues as well.
There are a ton of startups in the U.S. Why complicate your life?
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