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I don't get what the other two people are contributing. Money? It doesn't sound like they are contributing any work. Also when you say money is running out, whose money? Your personal money? If you are doing the engineering work, you should be taking zero financial risk imo, since they are contributing nothing.

Your entire story sounds like a red flag but the biggest red flag is that I don't hear a single mention of your users. Why are you asking "idea guys" for validation, you should be talking directly to users no matter what stage of development you are in.

From what you wrote, I really don't think you should take a cash infusion when the money runs out, just move on and find better partners in the future.

Note to other software engineers being approached by random angel investors: If you are being approached by an angel investor, please please vet them to make sure they are willing to do work. Ideas are valued at ZERO. If they are not technical, ask them to make a no code demo -- literally anyone can do this.

It's personal finances, I'm broke. I should leave? But then what, they gave me money and I still own the code. If I took the code it'd be unethical, but I believe in the project and don't want to let it go.

I mean, what is that code worth?

Yes your time as an engineer is valuable. And your time building that thing was worth taking a risk and learning something, in my opinion. But you don't have a business if you (or they) haven't found users clearly willing to pay.

It's definitely worth a lot more than what I got so far. These guys aren't scammers, they're just not very good at running a software project, and I was too desperate to take charge.

Even 1/3rd of a good business is a hell of a lot better than 100% of a bad one, or never being able to get anything off the ground at all.

That's the hard part of this whole situation, is that you weren't scammed, just had bad partners.

Btw, I know what I'm saying sounds harsh, but I also have to say, mad props for taking this risk. Unfortunately I think it was a bad decision but the experience probably taught you a ton and still cheaper than business school.

Be direct.

"I am out of runway to continue the project. If we want to pitch this I will need a minimum x/per y with a,b,c travel expenses covered when meeting with potential investors.

If they don't have money the project stops. Simple as that. The ownership of the code could be messy, review anything you have signed/agreed to.

Thanks, I'll give this a try - nothing to lose really.

Tbh dude, I wouldn't even do this. The deal you described in the OP is a HUGE red flag, especially in this funding environment where it's crazy easy to raise money for almost anything.

I would walk away and start fresh, this is a shit deal for you and if you continue with it, you'll get screwed over more 100%.

Why are you broke if there's an angel investor involved? Ask for more money or look for a different investor.

Or just stop working on this and start working on something that makes you actual money until these two are finally ready to make it a 3-person effort.

I worked for a pair of founders that blew all their savings on the company even with an investor involved which taught me that some investors are just regular old scammers. I'm quite glad to be long out of that place. Once you're out of money, they get to dangle your own company on a stick, especially if they'd prefer to take a larger and larger piece of the company for themself. OP's situation feels worryingly familiar to me.

A three-way split makes zero sense if you are doing all the work, and they are just saying, "Yep, looks good." Even aside from whether or not that is fair, they have no skin in this game. They can just ignore you and if you happen to succeed, take 66% of the company, leaving you a minority owner. And if you fail, no harm done to them.

Sorry, but this was a bad setup from the beginning. I'd walk away, lessons learned.

EDIT: Just saw your other comment that you were paid a lump sum for the demo. This makes it an even better time to walk away. They paid for a demo, you delivered it. Any more work means negotiate a new deal.

You're not a cofounder. You're a contractor.

Drop the project. Then go find an actual cofounder. Go out there and find an actual investor. When an investor gives you money for an enterprise, you will find that you will incorporate, the investor will send you a term sheet that gives them some portion of the company, you will have options that will vest over time for you and your cofounders. You can skip many of these if you are solo bootstrap founding, but otherwise, these are just so standard that the absence is a problem.

Listen, you're a software engineer. Go get a job. You'll make enough to keep you alive for 4 years in 1 year of work. So do the 1 year, then come back and do this the right way: talk to users, talk to VCs, get your pitch deck game strong, incorporate, get funding, then work. When you are funded, draw a salary.

Also, let me emphasize: this is not a "personal hell". This is , apparently, a few months wasted on a project. Walk away. Get a job. Make some money and come back. It'll give you some perspective.

Drop them, and drop the whole project. Don't even look back.

Just give them the code as is, "good luck, no hard feelings, I need to go earn money to live", as the drama isn't worth bothering to go though "give me this and then I'll give you that" routine. If you ever care about this idea just re-write it.

Parters worth having will be highly engaged and they will bring money to pay you.

Don't take the dev role with co-founders who cannot bring money to support you from day 1. You should not be dreading asking for money. You shouldn't even be thinking about it. They should have guaranteed and reliably paid you a reasonable wage.

It sounds like you’re in a bit of a weird state. Are you being paid?

It doesn’t really sound like this business is full time for anyone (other than perhaps you?).

In an early stage company you should be talking to your cofounders all the time. They’re your only coworkers after all. If that isn’t happening, this is just a little side project for them.

Based on your other comment, you were paid something to work on this project, with a vague promise of more money later. Is anything in writing?

If not, it needs to be. Does the company even legally exist yet, and have you been granted equity in it in writing?

Nothing in writing. Everyone's saying I should just drop it, but I'm thinking I should try to salvage the situation by dropping the ideas guy and coming to a formal agreement with the angel investor.

My feeling is this:

You’ve essentially been a discount contractor this far with a handshake agreement about ownership.

Right now, there is no business, just a product.

You’ve probably done whatever was initially agreed in terms of a demo and it’s time to talk next steps. You need to go into that negotiation with a frank understanding that you may need to walk away.

Aim to get (in writing) an agreement about what further funding for the business would be, and what the actual expectations on you are (in terms of time and deliverables). If they can’t do that, walk. I don’t know you or the ideas guy or your investor, but I feel that if you have an MVP, you’ve done a whole lot already. Definitely discuss, but you have to actually come to an agreement (with both parties, or just the investor) about real numbers, and a legal entity that is going to be the business going forward.

Also, something that hasn’t been mentioned. Where are you located? Norms for doing business are different in different places, and your approach might be different if you were in Europe, vs US, vs Brazil, vs India etc.

Of course, don’t give anything away that would identify you too uniquely.

Going forward, definitely get things in writing.

Even between friends, paperwork makes sure everyone knows who is committing to what. Prevents bad feelings.

Drop it. Even if they say "no, keep going here's some money" do not take it.

The fact that the other two shareholders have nothing to offer but setting up the money and business side have allowed it to be setup so badly at this point says it all.

But hey, you can hedge your bet. Just say, "ok guys, it's done, here's the demo. I hope we can succeed with this. Excited to hear updates"

Then simply move on to getting a job or other paying work. If they come back with any success and you're available then you can say you need a monthly wage to continue. Do not do anything at all with it unless you get that. If you get any "come on, I just need X to close the investor" just say "sorry, I'm not an angel like you.. I need to do this other work to pay my rent.

It doesn't matter if that is literally true or not, you do NOT have to be completely honest in this context. They sure haven't been honest with you.

Oh I'm definitely not going to work on this anymore until I see some real money and a proper agreement.

Echoing a lot of what others said, I would 100% drop this entirely and walk away. The deal you described is a terrible deal even if one of them was giving you a little bit of help.

You're living right now in the best fundraising environment tech has literally ever seen. If you have an actual good idea and can execute, you can raise real money on far better terms from more legit people. The fact those guys even let you take that deal tells me they will screw you over.

Real talk, I read stuff like this and it fills me with a sense of despair. Is this ease of raising just something people say or does it really match to people's experience?

I mean I have several companies under my belt that made great money, I have several startup where the MVP is done or nearly done (because I took time off during the first year of covid and programmed out a bunch of backburner projects) and another that is done and live that would represent a re-entry into a market I already did exceedingly well on (I have the k1s to prove it.)

And quite frankly, other than filling out an application for ycombinator (got to the final round a few years back for a telephony project but they picked twilio founders instead, haven't gotten to the interview round again as a solo founder), I have no idea how to get started. I didn't come from money, and my parents died when I was in my early twenties so is this "ease of raising" true but just for MIT/Stanford/Harvard grads and that section of society?

There are no founder meetups in my city anymore because of covid and idk how to get started from my house.

I mean I've done well for myself, I'm in the top 1% of my american social cohort for earnings, but I want to raise funds and I just don't how to start anymore.

I get the feeling you don't want to drop this, which I appreciate.

The thing that strikes me is that it sounds like the other guys involved in the project weren't involved.

Think of them as your long-term business partners. You're supposed to be starting a start-up with a team, not with a bunch of coaches, an owner and one player.

At the same time, having been an SE, a PM, and a CEO, I do know that sometimes different roles don't understand what everyone is doing. It sounds like you have a very good handle on SE & PM roles, and I suspect you are correct in your thinking when you say that the other guys haven't been pulling there weight. I think this is what you want to dig into.

I'd have a chat to the investor about how he see's the company and team progressing, without complaining about the partners. Perhaps he can give some insight into why he believes in the team, maybe something you are missing. Be cautious of how you bring up "concerns" with the investor, as you don't want to damage the relationship.

A few good things could happen. Maybe you get a better feeling for how the investor sees things panning out, and are convinced that whatever you are working on has legs. If not, perhaps the investor has other investments where you may be a good fit as an engineer.

Perhaps you take the demo yourself and talk to some would be users and get feedback (I'd do this anyway). Doesn't mean you're stealing the code and going rogue, but you want to know what a potential user thinks of what you made. From there, you can also decide if this is a good thing to continue working on (I agree with all the comments that have said you should be able to sell without a demo).

Best of luck

It's about commitment. There's a saying, "Are you the chicken or the pig in this ham and eggs breakfast?"

There are all sorts of reasons why this isn't going to work and I think you know that. This has been another great learning experience, but it might just be time to move on.

You should get out now -- you got some experience building a project and got paid some for it. From personal experience, it's likely your "co-founders" will continue similarly as before, causing you additional stress. Until the exact details of the 1/3 agreement are in writing there are innumerable ways you could be screwed, especially since your co-founders have shown they are untrustworthy.

I understand your point about 1/3 being better than nothing. However, 2/3 of the stock being tied up by do-nothing founders will prevent future funding. It would be better for you to use your experience here to make an even better product with new founders.

My two cents:

- Start looking for other income sources right now

- Stop performing any work for them

- Withhold the project from them, don't let them take it from you. Tell them that this is the right time to set our expectations and agreements in writing - implying that if they don't commit to writing down terms with you, you're not letting them use the project

I have the impression that they were treating this like a low-risk low-effort way of getting some work down that they could raise money against in the future. There is little downside for them, so they don't care.

Whats your business arrangement? Did you spin up a c corp yet? Did you sign over IP? Do you have a cliff or vesting schedule?

Not really sure what the financial situation is but it kinda sounds like they hired you as a contractor or they are just hanger-ons and not really business partners among equals. Lots of people will happily take a big cut of your business without contributing anything.

And I don't know building consumer... but you should get users/customers & get feedback back from them. Thinking you need to pitch to VC's with the perfect deck or app is a trap, what you need to do is build a product and business.

There's no paper work, just a verbal agreement to start a company.

As for the customers, there needs to be a demo because this particular project doesn't quite work for consumers at this stage. To begin with it's a SaaS for businesses. Meaning we'll have to pitch it directly to the business at first.

I whole heartedly disagree, you can absolutely sell to businesses without a real coded app. The trick is to pitch to businesses and ask if they'd be willing to pay for a solution once it's finished being built and get them to sign paperwork stating such (maybe with a reduced price or something). If you're the technical founder, this is what your cofounders should be doing.

If your solution really solves their problem, they will do it. This happens all the time and I've seen million dollar deals happen this way.

You might be right, but we have the demo now anyway. The problem is that this shouldn't have been so painful for me in the first place. It's just a few months working on a cool product. They could throw me some cash to make sure I'm okay, and I'd be happy.

Their inability to be fair/competent is what's breaking me.

Then stop working on it and start working on something new. They can't reasonably expect you to do all the work for not enough pay while they contribute nothing.

>> There's no paper work

No written agreement & they are sending you cash! Wow.

> The problem is that this shouldn't have been so painful for me in the first place

Startups are incredibly painful, especially at the early stage. There are always exceptions, but lots of red flags to what you've described. Most importantly it doesn't sound like your team is committed... But it also seems like they lack the relevant competency in Sales, Product or Startups. You might learn a lot by going down the path you're on, but it sounds like you're going to be learning by running through walls so I would expect it to hurt.

Dude. Yeah I was dumb. Whatever, I'll live.

I'm not sure I'd call anything you did dumb or frame it that negatively.

them sending you cash without paperwork? That's more don them. The biggest risk for you is the expectation management and scope to wind it down.

And I wouldn't be hard on yourself if your first try doesn't get off the ground, most startups don't. Just learn, grow and have fun.

This. You have much cheaper ways to validate than building something without talking to people.

I think my main question is: how honest should I be? Not about getting emotional or anything, but if I have real concerns and my work is actually good, is there a reason I shouldn't be 100% direct?

You sound all over the place. It’s not clear what’s not working and what your arrangement is.

“I depend on them to survive right now”

What does that mean? Are they funding (paying you)? Are you working for free based on a vague promise?

They funded me at the start a lump sum to build the demo, and then there was a vague promise to send me some more once I delivered so that I could continue working while we pitch it to investors.

The thing that's not working for me is the vague promise and the fact that I feel like a student who was put on a team project and left to do it alone. Throughout I was told that they like the results, so I kept working on it without finding other sources of income.

Apologies for being all over the place, I'm not in the best mental state and it's a long story (to me at least).

> They funded me at the start a lump sum

Sounds like they paid you to build this app. It doesn't sound like you're a co-founder of a company to me.

Do you have an agreement? Are the roles and funding spelled out? To me it sounds like you're an employee! A free one at that!

I'll concur with others that it's time to walk away.

Ask HN: Stressed by Cofounders