equity, partnership, co-founderI am an Ivy-league business school graduate with experience in finance, strategy, retail and merchandising. I am about to go into partnership with a fashion designer to help grow a startup and would like some advice on structuring the partnership.
The fashion startup is almost 4 years old, unprofitable with minimal revenues, and currently selling in no stores. After doing some work on the brand’s strategic positioning, I will be recreating the brand - creating a business plan, relaunching the brand, changing all retail prices, changing the brand name, bringing in investors at a future point in time, introducing the brand to stores, to name a few tasks…I will be essentially changing many basic fundamentals of the business, almost starting the business from ground zero.
I would like to know if I can take a co-founder title. Other ideas for a title are - Founding Partner, Managing Partner, Partner. I am curious to know what your thoughts are on this.
I will work for sweat equity in the company with step-ups for successes in achieving sales or entering stores, salary to be negotiated when the company becomes profitable. I would like to know what % equity is appropriate at this level of the business. I would like to ultimately work in an equal partnership.
In my opinion the answers are all in the question:
The fashion startup is almost 4 years old, unprofitable with minimal revenues, and currently selling in no stores.
I can take a co-founder title.
I will work for sweat equity in the company with step-ups for successes in achieving sales or entering stores, salary to be negotiated when the company becomes profitable.
I would like to ultimately work in an equal partnership.
The designer is going nowhere, is not able to lift things off the ground, and has no money to pay you. So if you feel like taking that risk, bootstrap the sales with a vesting schedule that you both find acceptable. Half of the company is by no means outlandish: better half of something than all of nothing.
Also, triple check that the founders are still motivated. I’ve run into a few founders who extended that type of deal to me in the past, and the sorry reality is they had been going nowhere for so long that they no longer were willing to put any effort in their own business. All of them.
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