Stories by Dr. Dana Ardi

Ask Dr. Dana

Q: I'm 37, with extensive technology and finance experience. Several months ago, I was approached by a 22-year-old acquaintance who wanted me to team up with him to launch an Internet start-up based on an idea and a rough business plan that he wrote. The original idea came from a third party, who in return was promised 1 percent of the equity if the business got funded. I rewrote the business plan and arranged VC meetings my partner wouldn't have been able to get on his own. Our verbal deal was that I'd get 62.5 percent of the founder's equity; he'd get the balance of founders' shares. No VCs have bitten and I'm having second thoughts. If I drop out, how do we redetermine the split of founders' equity? If my partner drops out due to lack of funding, after I've dropped out, who retains the rights to the plan and concept going forward?

Ask Dr. Dana: Distance Learning

Founding a Web company with partners is the same as getting married. You're entering a long-term relationship that will include the joys of victory and the agonies of defeat. Not all roles will fit all people. Many good-idea people are not effective executors. They lack a "whatever it takes" attitude and can't handle the pressures of 24-7 schedules and fundraising. The romanticism surrounding the Internet startup dream can quickly become a nightmare if you haven't chosen your mates wisely.