Love this, It is 100% true
Shubham SHARMA
11

It is true. These are the key takeaways for me from several attempts at joint ventures and startups in my time. The evidence is almost always there. Indeed, when folk ask you to join for an equity stake on a zero value company, it’s never worth your time!

I’m all for startups. I’m a big advocate of them. However, this approach has gotten ridiculous. As offering equity in zero value companies offers nothing and what’s worse, many founders approaching developers do not understand that it ceases to just be their company any more. Shareholding of more than 30% in the UK comes with voting rights. There is no getting around that unless you rewrite and resubmit the governing documents which are likely to get rejected. That means even if they conned a developer enough to go for a zero valued company, they have a responsibility to allow the developer to influence how the company is run. However, if a developer is naive enough to go for a zero valued equity stake, they are also gullible enough to leave it all to the loser of a founder, who we’ve established, has no business acumen, and they won’t ultimately be the sort of person people will want to work with. So they’re a liability and huge one at that, since the losses will be yours in the majority, since they contributed nothing to bring the product to market, so lost 1 dollar for every dollar they invested. You did it all, so lost at least 2 dollars, given the product's failure and your inability to earn in the meantime.

That’s the developer’s own fault by that point. As it has been mine in the past. As the saying goes:

Fool me once shame on you, fool me twice, shame on me
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