Co-founder changing to part-time contribution…re-negotiate equity?

Hi! I co-founded a startup about 6 months ago with a 65/35 split (no other compensation right now), where I have 65% and my co-founder has 35%. We have a 4 year vesting period with a 1-year cliff. Their role is business development and marketing. My role is product, technical, and anything else that needs to get done. I also have more experience in the industry, with startups, and have the funds to bootstrap it, which all contributed to my higher percentage (for reference). In the last couple of months, I noticed that my co-founder wasn't putting in as much effort and was failing to deliver on things we had agreed. After bringing it up a few times and seeing no improvements, I asked them to take some time off in order to really think about whether they were still interested in doing this and able to balance work/life. When they came back from that break, they confirmed that they were still very interested in continuing to work towards our mission, but that their private life was getting in the way and that they would only be able to contribute part-time work for the foreseeable future (think at least 1 & 1/2 years).

I should also mention that we've worked together at a prior company, so I already know their work ethic and that they can get things done, otherwise, I wouldn't even be considering this. With that said, the company was definitely larger and with product-market fit. This person has never worked in a true startup environment and has struggled a bit with that. I see them as providing the most value longer-term, but at the same time, by then I'd be able to hire someone with similar skills, so I've tried to keep those facts in mind when issuing a fair equity stake. On the flip side, I do believe that having this person on, even part-time, will help us accelerate revenue and user growth more than if they weren't there at all.

Given all of that, I don't feel like 35% is fair anymore, so I've been thinking about an alternative compensation model that would be made up of a significantly lower equity stake (< 10%), but with a commission structure based on revenue generated. We've already generated revenue (not much), and should be generating quite a bit more this year, but I don't think we'll break 6 figures yet. So while the commissions won't be much this year, they should ramp up over time.

This would also enable me to set very specific targets that need to be met so that if the behavior of failing to deliver happens again, we can cleanly part ways. But if they do deliver, they'll get actual cash compensation + still have a stake in the company's long-term value.

My questions are: have you ever been in this situation? If so, how'd you handle it? Even if you haven't been, what would you do if you were in my position? Although I've been part of a few startups, I've never dealt with a part-time co-founder, so this is new to me. If you think this is a terrible idea, would love to hear it and your alternative ideas! Happy to provide additional details that I may have missed!

Side note: I'm trying to avoid paying a salary until we bring in more revenue since we are bootstrapped and I don't have unlimited funds.

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Drone-focused construction startup TraceAir raises $3.5M

Bay Area-based construction startup TraceAir today announced a $ 3.5 million Series A. Led by London-based XTX Ventures, this round brings the company’s total funding up to $ 7 million. The raise includes existing investor Metropolis VC, along with new additions Liquid 2 Ventures, GEM Capital, GPS Ventures and Andrew Filev.

We first noted the company back in 2016, when it pitched a method for using drones to spot construction errors before they become too expense. It’s a pretty massive field that various technology companies are attempting to solve through a variety of different means, ranging from quadrupedal robots to site-scanning hard hats.

Last February, TraceAir announced a new drone management tool. “Haul Router provides the best mathematically objective hauls for each given drone scan,” the company noted at the time. “Any employee can use the tool to design a haul road and export the results to feed into grading equipment.”

The pandemic has thrown the construction industry for a loop (along with countless others). But unlike other sectors, demand still remains high in many places. TraceAir is hoping its solution will prove beneficial as many outfits seek a way to continue the process in spite of uncertainty.

“The Covid-19 pandemic created new challenges for the U.S. and worldwide construction industries, resulting in delayed projects and growing unemployment rates,” CEO Dmitry Korolev said in a release tied to the news. “Our platform allows industry leaders to manage projects more efficiently and collaborate with their teams remotely, minimizing the need for a physical presence on-site.”

TraceAir says the additional funding will go toward its sales and marketing, along with future product developments, including an unnamed product set for release this quarter.

Startups – TechCrunch

7 questions to ask before launching a startup.

A summary of key insights from Zero to one. Curious what others in the sub would add to this.

Engineering Question – Do we have a technology that is 10x better than the competition?

Timing Question – Is now the right time to start this business?

Monopoly Question – Are we starting with a big share of a small market?

People Question – Do we have the right team?

Distribution Question – Do we have a way to deliver our product?

Durability Question – Will our market position be defensible 10 years from now?

The Secret Question – Have you identified a unique opportunity that others don't see?

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Bolt Mobility launching into 48 new markets after snapping up Last Mile’s assets

Bolt Mobility, the Miami-based micromobility startup co-founded by Olympic gold medalist Usain Bolt, is expanding to 48 new markets after acquiring the assets of Last Mile Holdings.

Bolt Mobility’s rise and Last Mile’s demise captures the uncertainty that plagued micromobility companies in the past year as the COVID-19 pandemic upended business models that were, in some cases, already on shaky ground.

Bolt Mobility and Last Mile were both negatively affected by the COVID-19 pandemic. Bolt Mobility, for instance, had to shut down in several markets in early 2020 due to the pandemic. The company rebounded after it tweaked its business model and began to partner with local operators, added GM’s former VP global design Ed Welburn as an adviser and came out with a new scooter equipped with dual brakes, 10-inch wheels, LED lights, swappable batteries with 25 miles of range and NanoSeptic surfaces on its handlebars and brake levers designed to rid these common contact points of germs and bacteria.

Last Mile Holdings didn’t fare as well.

If Last Mile Holdings doesn’t sound familiar, the brands it once owned might. Last Mile was a holding company that owned the OjO Electric scooters and Gotcha Mobility, which had a portfolio of electric trikes, scooters and bikes. The company acquired Gotcha in a $ 12 million cash and stock deal that closed in March 2020.

As Bolt Mobility grew, with its customer base hitting 300,000 users in 2020, Last Mile hit headwinds. Last Mile Holdings, which traded on the Toronto Stock Exchange under MILE, ended up selling its U.S. assets in an auction. Bolt Mobility acquired substantially all of the assets of the company for a credit bid of $ 3 million, according to a filing at the end of the year.

Those assets include 8,500 new devices, including e-scooters, e-bikes, pedal bikes and sit-down cruisers and licenses to operate in 48 new markets, the majority of which (more than 30) are exclusive contracts, according to Bolt CEO Ignacio Tzoumas. The 48 new markets include 18 university campuses.

“The acquisition represents a significant expansion for Bolt on all fronts,” Tzoumas said, adding that the company brought on former Gotcha Chief Operating Officer Matt Tolan, who will now serve as Bolt’s chief commercial officer, as well as about 20 team members who were formerly a part of Gotcha’s tech and operations teams.

Riders in Bolt’s new markets will continue to be able to access and use the e-scooters, e-bikes and pedal bikes through the Gotcha Mobility and Ojo Electric iOS and Android mobile apps. Bolt is working with cities and universities to transition these markets to Bolt’s platform. The acquisition adds e-bikes to the Bolt platform for the first time. Although, the company was already developing its own line of e-bikes that it plans to launch later this year.

Gotcha Powered By Bolt

Image Credits: Bolt Mobility

Bolt credits its new business model for helping it survive and even thrive in 2020. Instead of continuing to handle the complex and expensive task of fleet management and operations, Bolt decided to partner with local companies. These partners operate Bolt’s fleets on the ground in each individual market. This customizable approach allowed for a business partnership model in select markets where Bolt leased scooters to delivery workers, restaurants and other small businesses, the company said. 

By July, Bolt and its partners were operating in five new or re-launched markets. Bolt also has a backlog of agreements with partners for an additional 20 markets that the acquisition is primed to fulfill, according to the company. 

Tzoumas said Bolt was able to execute the deal without taking on any additional debt, and “under terms that will allow us to continue devoting our resources to expanding and improving our services in all of the markets where we operate.” The acquisition was funded in part by Fuel Venture Capital, an existing Bolt investor.  Bolt is also backed by Sofreh Capital and The Yucaipa Companies.

“We founded Bolt because we believe in micromobility as a movement that can transform the way people live and move within their communities,” Usain Bolt said in a statement. “This expansion proves that anything is possible for micromobility when you support it with talented people, innovative technology, and the incredible work ethic of the Bolt team.”

Startups – TechCrunch

Are student startups a good idea?

Hello there!

Sorry if the topic is repeated. I searched but the topic seems to be ambigious to a certain limit.

I'm a senior software engineering student. My design and coding skills are good and I worked on some projects before and enjoyed it. I love coding.. it's my passion and can't imagine myself in other field.

However, all the projects I worked on were mine, or in other words, they were for my benefit in a way or another mostly as skill improvement or for school grades.. etc.

But lately, I had the experience to work for a small firm for the first time in my life, and to be honest.. I didn't like it. Everyone were excited and working hard, but for some reason I couldn't get over the idea of spending my life for the profit of someone else for few bucks. I just didn't like the feeling and couldn't get excited.. so I left them and went back to work on my personal learning projects.

From here I had the idea of beginning my own startup.. I have the core idea of the project in my mind, but for the business and marketing side, I believe that I lack some critical skills. probably I'm starting with my own money not by a loan.

1- Can you guys suggest me some good resources and stories to build more knowledge about what to expect in this experience?

2- Do you suggest me to wait until the idea is fully baked from all aspects or rush to start and learn by doing mistakes?

3- Do you suggest me to start to work alone, or form a team with other students? students are usually busy, same for me but at least by working alone I can work on my own free time.

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Startups – Rapid Growth and Innovation is in Our Very Nature!

How and when to build marketing teams at deep tech companies

Deep tech startups develop cutting-edge innovations with the power to truly revolutionize society. The founding team members at these companies often come from deeply technical backgrounds, which powers rapid product progress but can create bottlenecks on the go-to-market side.

In this post, I outline the answers to four key questions around marketing at early-stage deep tech companies that are post-revenue:

  • What marketing teams at deep tech companies do.
  • When to hire the marketing team.
  • Whether the marketing team needs industry experience.
  • How to source and evaluate talent for the marketing team.

From this post, deep tech startups can formulate their marketing hiring strategy and attract and cultivate top talent to drive their go-to-market plan. Without business execution, even the most groundbreaking innovations do not achieve their intended impact.

What do marketing teams at deep tech companies do?

To set the context, I share below the typical projects of deep tech marketing teams, which look different from marketing in other industries given the greater product focus and complexity, regulatory oversight and longer time to market.

Go-to-market

Marketers leverage the strength of the IP to establish collaborations with large companies, such as pharma companies and institutions, such as the government, universities or hospitals. To this end, marketers develop creative ways to gather lists of, and information on, key contacts at these potential partners. They also build sales collateral, such as demo videos, pitch decks and one-pagers, to more effectively reach and build long-term relationships with these prospects.

More broadly, marketers also develop the go-to-market strategy beyond partnerships. To this end, marketers conduct in-depth market research on business models, monetization strategies and reimbursement channels.

Communications

Marketers create original content to establish the company as a thought leader, build the company’s brand credibility through social media and apply for awards and honors to validate the potential of the company’s solution.

Forecasting

Marketers work with finance and product teams to formulate projections as the company moves into the clinical phase.

When should deep tech companies hire marketers?

The CEO and other members of the founding team take on marketing work in the formation stage to better understand and empathize with the needs, capabilities and opportunities in the department before bringing someone on full time.

Once the product shows signs of repeatable revenue, a marketing lead is needed. Specifically, this is ahead of a large Series A round, after a small Series A round or when a commercial partner has expressed interest in larger, long-term contracts. Instead of the typical chief marketing officer or chief revenue officer title, deep tech startups call this person a chief commercial officer or chief partnerships officer.

For additional support in the formation stage, companies bring on MBA interns and work with their investors. Prior to the Series A, platform teams at deep tech venture-capital funds are hands-on in helping with marketing through actually doing marketing projects for their portfolio companies, ideating on long-term marketing strategy with the founders through regular feedback sessions and connecting founders with vetted marketing contractors or agencies.

For companies that require FDA approval, commercial advisors, consultants and board members fully take on the partnership strategy work (which represents the bulk of the marketing needs) prior to the Series A round. Similarly, external consultants, such as marketing agencies, can take over major projects like launch strategy. External consultants can then join the team should their performance be strong.

For drug-development companies, the marketing leader is most crucial when the company enters the clinical phase and prepares for trials, regardless of funding stage.

Do marketing hires need industry experience?

Of course, it is ideal to hire someone with experience selling into the space and someone who is comfortable with the complex supply chains and long sales cycles. However, if the choice is between someone with functional expertise but no industry expertise and someone with industry experience but limited or no functional expertise, it is better to hire the former candidate and leverage the rest of the team for domain expertise. Deep tech is a niche area, so the other team members can support the marketer in developing industry expertise.

Startups – TechCrunch

Uppbeat launches a freemium music platform aimed at YouTubers

A new music platform, Uppbeat, aims to make it easier for YouTubers and other content creators to find quality free music to use in their videos. The system, which is designed to navigate the complexities of copyright claims while also fairly compensating artists, offers an alternative to existing free music platforms, including YouTube’s own Audio Library and Creative Commons’ legal music for videos, for example.

The idea for the startup comes from Lewis Foster and Matt Russell, the U.K.-based co-founders of another music-licensing company, Music Vine, which has been operating for about six years.

Last year, the co-founders realized there was a growing opportunity to address the creator space with a slightly different product.

“We were realizing, more and more, was that the creator space — YouTubers, streamers, podcasters — has become enormous, but there wasn’t a music platform that was doing a nice job for those type of users,” explains Foster. “So we sat down and thought about what the perfect music resource would look like for creators. That led to deciding to build Uppbeat,” he says.

They began developing the Uppbeat website in September 2020 and launched it to the public on Monday.

On the creators’ side, Uppbeat’s key focus is on eliminating headaches over copyright claims, particularly on YouTube.

Currently, if a YouTuber gets a copyright claim over music in their video, it can cause them to lose income. Though YouTube has worked to address this problem over the years with new features and changes to its Content ID match system, it’s still an issue.

“If a YouTuber gets a copyright claim, [YouTube] can de-monetize their video. And if they go through YouTube’s dispute system, it can take as long as 30 days for it to get resolved. It’s a pretty big frustration for YouTubers,” Foster says.

Uppbeat’s music will instead almost instantly clear the claims.

Image Credits: Uppbeat

Similar to Spotify, the Uppbeat website leverages a freemium model, To get started, creators can sign up for a free account that provides access to about 50% of the site’s roughly 1,000-track music catalog and 10 downloads per month. The paid plan offers full catalog access and no download limit.

Free users simply add a credit to their YouTube video description to clear copyright claims, while paid users are added to an approved list, eliminating this extra step.

Because the tracks have to be fingerprinted to fight off unlicensed usage, a copyright claim will still occur. But instead of taking days or weeks to resolve, it will be cleared within about five minutes, the company says. The Uppbeat system clears the claim by checking the video description for the necessary credit and by checking the claim against its list of paid users. This is all automated, too, which helps to speed things up.

Image Credits: Uppbeat

Meanwhile, on the artists’ side, Uppbeat pays as their music is used — even by the free users.

The revenue from the premium subscriptions, and soon, advertising, is divided between the artists on a monthly basis, in proportion to the number of downloads the artist receives.

“What that means from the artists’ perspective is, on average, they’re going to make the same amount from tracks on the premium side as they do on the free side,” says Lewis. “It means, even for free usage, they will get paid,” he adds.

The site will also monetize through audio ads that play as you browse the tracks and listen to the music. (However, these are just promoting the paid plan for the time being.)

Browsing Uppbeat’s catalog is easy, too. The music is organized by genre, theme and style in colorful rows that aim to introduce all the different types of music and beats a YouTuber may need. For example, there’s music customized for use  in the background and other tracks that cater to different moods like inspiring, calm, happy, dramatic and more. A catalog of SFX (sound effects) is expected to be added in a few months, too.

Uppbeat believes its existing music industry connections with producers, composers and songwriters via Music Vine will help them to source higher-quality tracks than other free music services.

At present, the startup is self-funded through revenues from Music Vine, but Foster says they’ve had some VC interest. For now, though, the founders are looking to keep the ownership in-house, for the most part.

However, Uppbeat is experimenting with both a referral program and a profit-sharing scheme. The latter will allow YouTubers who bring Uppbeat new customers, then take the full revenue from those customers for two years’ time.

“We’re taking a massive sacrifice,” Foster admits. “But from from our perspective, the faster we can get Uppbeat out there and well-known in the YouTuber space, then we’re happy to share that [revenue]. We think it’s a cool idea to share that within the YouTuber community, rather than [take] a big private investment,” he notes.

The startup is also considering making shares in the company available to some larger YouTubers, Foster adds.

Today, Uppbeat is a team of eight employees and 12 freelancers, based in Leeds, U.K.

 

Startups – TechCrunch

Penji offers unlimited graphic design work for one monthly rate

Graphic design brings your print and digital marketing materials to life. It’s an important part of creating eye-catching and on-brand advertisements, brochures, websites, merchandise, and more. However, hiring graphic designers can be expensive, and attempting to do graphic design work on your own can be difficult without proper training or experience. Instead, try Penji.

Penji is an on-demand graphic design service that helps thousands of marketers and agencies achieve better results. You can submit unlimited print, digital, or UX/UI design requests, then let Penji’s fully managed team of vetted talent work their magic.

With Penji, there’s no hiring, no HR, and no hourly billing involved. Instead, you pay one flat monthly rate to cover all of your design needs. Here’s how it works:

Create a design project: Simply fill out a form to tell the designers about the project and what you’re envisioning. You can also upload any attachments that need to be included and choose the file types you want.

Project is designed: Penji automatically matches you with the designer best suited for your specific project. You’ll be able to communicate with your designer right on Penji’s platform. You will receive your first draft within 24 to 48 hours.

Review work: After reviewing your work, you can either download your files if you’re satisfied with the work or submit a request for revisions if it’s not quite what you were hoping for. Penji offers unlimited revisions.

Download your files: When you’re happy with the results, you can download your files. You’ll receive the design files as well as the source files.

Features
Penji includes a range of features to achieve your graphic design needs.

Variety of project types: Whether you need graphic design work for social media, beverage labels, vehicle wraps, catalogs, digital ads, newsletters, or something else, odds are Penji can create it. All pricing plans come with general graphic design capabilities, including branding, digital, marketing, merch sellers, print projects, and more. Team and Agency plans also include custom illustrations, web design, app design, and infographics.

Unlimited design projects: You can submit as many project requests as you’d like for one flat monthly rate.

Unlimited revisions: You can submit as many revisions as you’d like until you’re happy with the final product.

Vetted designers: Penji works with the top graphic designers, so there’s always someone capable of completing your project.

Fast turnaround: Most projects will be completed and returned for your review within 24 to 48 hours.

No hidden fees: Instead of paying hourly rates or per-project fees, with Penji, you pay one monthly price for all of your design needs.

Invite your team: Penji allows you to invite your team members or clients to collaborate on the project.

Human support: When you contact Penji, you get to talk to a real person, not a bot. You’ll also be assigned a dedicated account manager to ensure the project runs smoothly.

File ownership: You’ll have 100% ownership over all of the original source files that were created for your project.

15-day money-back guarantee: You can try Penji risk-free for 15 days. If you’re not satisfied, you can receive a full refund.

Interested?
You’ve got other things to focus on – leave the graphic design work to the professionals. If Penji sounds like it might be the right solution for you, visit penji.co to learn more.

Photos
Penji

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KillerStartups

WJR Business Beat with Jeff Sloan: Number of New Businesses Created in the U.S. Rising at Historical Pace (Episode 162)

We all know that the COVID pandemic has created a massive wave of job losses in the U.S. over the last year. So, with all of this economic hardship, one would reasonably assume that the rate of new businesses is at a standstill, right?

Wrong!

Over the past three months, more new businesses have been launched in the United States than in any other quarter in our history: Between June and September of 2020, nearly 1.4 million startups were founded.

Tune in to this morning’s WJR Business Beat to hear Jeff discuss this incredible wave of new businesses:

“If you’ve ever dreamed of carving your own path and doing it your way, now is actually a great time to do just that. While this crisis has undoubtedly turned everything upside down in so many ways, doing that has forced changes in consumerism and ways of doing business that are flinging doors wide open to new opportunities in almost every aspect of business. So, turn this time of crisis into your time of commitment and be part of the amazing wave of business startups sweeping the country today.”

– Jeff Sloan

Tune in to News/Talk 760 AM WJR weekday mornings at 7:11 a.m. for the WJR Business Beat. Listeners outside of the Detroit area can listen live HERE.

Are you an entrepreneur with a great story to share? If so, contact us at editor@startupnation.com and we’ll feature you on an upcoming segment of the WJR Business Beat!

Good morning, Paul.

I’ve got some surprising but welcome news to help us all get rolling on this Monday morning. We all know that the COVID pandemic has created a massive wave of job losses in the U.S. over the last year.

So, with all of this economic hardship as the backdrop, one would reasonably assume that the rate of new business startups in this most dreadful business climate is simply at a standstill, right?

Over the past three months, more new businesses have been launched in the United States than in any other quarter in our history.

Amazing, but true. Between June and September, nearly 1.4 million startups were founded. So, the question is, “why?”

Well, the biggest reason: a meaningful percentage of people who have been laid off are at the end of their ropes with the notion of corporate job security. The reality is, one day you have a job, and in an instant, it can be gone.

So, where do you go from here? Look for another job, or do you start a business of your own? Winning or losing based on how much effort you put in and creating your own sense of security has become a very appealing alternative.

Now, I don’t know about you, Paul, but there is something so gratifying and joyous about the idea of people choosing the pioneering and enterprising path of doing one’s own thing and being one’s own boss. Those ideals have been entrenched in our great American spirits since someone uttered the words, “Go west, young man!”

So, if you’ve ever dreamed of carving your own path and doing it your way, now is actually a great time to do just that. While this crisis has undoubtedly turned everything upside down in so many ways, doing that has forced changes in consumerism and ways of doing business that are flinging doors wide open to new opportunities in almost every aspect of business. So, turn this time of crisis into your time of commitment and be part of the amazing wave of business startups sweeping the country today.

I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat, on the Great Voice of the Great Lakes, WJR.

The post WJR Business Beat with Jeff Sloan: Number of New Businesses Created in the U.S. Rising at Historical Pace (Episode 162) appeared first on StartupNation.

StartupNation

Microsoft invests in Cruise in new $2 billion round

Cruise has raised $ 2 billion in a new equity round that has pushed its valuation up to $ 30 billion and delivered Microsoft as an investor and partner.

GM, Honda and other institutional investors have also put more capital into Cruise as the autonomous vehicle company inches closer to commercializing its technology.

While Microsoft’s capital is important, the partnership might provide equal and longer-term value for Cruise, at least in the two companies’ views. Under the long-term strategic partnership, Cruise will use Azure, Microsoft’s cloud and edge computing platform, for its yet-to-be launched autonomous vehicle ride-hailing service.

Any autonomous vehicle company aiming to commercialize — meaning bring their tech to the public at scale — needs a robust cloud computing platform. Operating fleets of self-driving vehicles that will shuttle people and even packages generates a massive amount of data, making cloud services one of the bigger costs for an AV company.

Cruise’s partnership with Microsoft aims to provide benefits for both companies. Cruise will be able to lock in lower prices for cloud services and Microsoft will be able to test some of its bleeding-edge systems that can handle workloads needed to bring machine learning and robotics — like autonomous vehicles — to life and at scale.

“Advances in digital technology are redefining every aspect of our work and life, including how we move people and goods,” Microsoft CEO Satya Nadella said in a statement. “As Cruise and GM’s preferred cloud, we will apply the power of Azure to help them scale and make autonomous transportation mainstream.”

The partnership extends to GM as well, according to Tuesday’s announcement. Microsoft will be GM’s preferred public cloud provider to help the automaker accelerate several of it digitization initiatives as well as streamline operations across digital supply chains.

The partnership will not only allow Cruise to accelerate the commercialization of its all-electric, self-driving vehicles, it helps “GM realize even more benefits from cloud computing as we launch 30 new electric vehicles globally by 2025 and create new businesses and services to drive growth, GM Chairman and CEO Mary Barra said.

Startups – TechCrunch