Looking for Web/App developer to partner with in return for 20% equity in our venture

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WhichVoIP

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Good day, I trust you are well.

One of our stakeholders are currently enrolled in an Entrepreneur Accelerator programme in the Tech space and the idea requires Web and App development. The business plan which has already gone through extensive market research and the idea is validated and the opportunity confirmed as viable.

The idea will be presented to investors in 2 weeks who will hopefully inject capital to bring the idea to life. At this point, he is missing a Web/App developer to bring the nuts and bolts together. The idea is based on a platform which will integrate into main stream Social Media networks and rely on Insights from these networks to design marketing campaigns at ease for businesses of all sizes.

In return for development of this idea, he is looking for someone who will do the development in return for 20% equity in the business. Should the investors not select the idea this will still be pursued and brought to the market nevertheless.

If you have Web and App development skills and are looking to get involved as a business partner in return for your skill set then please reach out so that we can discuss in more detail.

Thanks in advance. Feel free to drop me an email at [email protected]

Mitch
 
Why not just wait for the investment to come to fruition and then hire a developer?
 
DJ... said:
Why not just wait for the investment to come to fruition and then hire a developer?
Click to expand...

Good point. I wonder if this is just trying to gage interest, get the ball rolling, before the capital injection?
 
WhichVoIP said:
Good day, I trust you are well.

One of our stakeholders are currently enrolled in an Entrepreneur Accelerator programme in the Tech space and the idea requires Web and App development. The business plan which has already gone through extensive market research and the idea is validated and the opportunity confirmed as viable.

The idea will be presented to investors in 2 weeks who will hopefully inject capital to bring the idea to life. At this point, he is missing a Web/App developer to bring the nuts and bolts together. The idea is based on a platform which will integrate into main stream Social Media networks and rely on Insights from these networks to design marketing campaigns at ease for businesses of all sizes.

In return for development of this idea, he is looking for someone who will do the development in return for 20% equity in the business. Should the investors not select the idea this will still be pursued and brought to the market nevertheless.

If you have Web and App development skills and are looking to get involved as a business partner in return for your skill set then please reach out so that we can discuss in more detail.

Thanks in advance. Feel free to drop me an email at [email protected]

Mitch
Click to expand...

I've been approached to do this kind of thing on several occasions. Other developers I know have refered to it sarcastically as the "pesky problem of implementation" with a startup. There's a couple of assumptions you have made which are incorrect , so allow me to help you :

1.The idea is worth 20% and the implementation is worth 80% , not the other way around. And that's when the idea is solid and has been vetted. In order to coax a good developer into accepting 20% , there better be a competitive salary involved as well. Hopeful tech entrepreneurs are a dime a dozen. Skilled developers are like hens teeth.

Without a salary , I would only go into it if the idea was good and I was offered 60%-70% of the company. Remember , I'm not just putting the "nuts and bolts" together. That is a common mistake made by entrepreneurs. I AM the company. Without the developer you have nothing. Without the entrepreneur I can formulate my own ideas and implement them.

Even if those ideas are not as good , I have 100% of my average idea , and you have 0% of your great idea.

2. You cannot recruit junior developers for a startup. And these are the types that you will find will be interested in your cause. Seniors will not. It will be very tempting to hire these juniors who show promise , energy and interest.

Devs at the beginning of a project need to be fairly senior , otherwise nothing will get done , money will be drained and the venture will tank. Juniors can work with foundations laid by more senior devs , but if you allow them to build from scratch your venture is doomed before it starts.

3. You have to convince the developer to leave paid employment. These guys are not hanging around waiting for work. They have some already. You will have to spend 2-3 months finding a good dev and then ramp up time will be another 2 months or so before they are completely productive. And that is how long it will take if you offer a good salary.

4. Since you don't have web/software project management experience , you need the developer to have that as well. Just being a dev is not going to cut it.

You might get lucky and get someone quickly. However , my estimates are that :

You won't find anyone worthwhile without a 30k - 40k a month salary at least WITH 20% of the company thrown in.
The process will take you at LEAST 3-4 months.

Good luck
 
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retromodcoza said:
The idea is worth 20% and the implementation is worth 80% , not the other way around. And that's when the idea is solid and has been vetted. In order to coax a good developer into accepting 20% , there better be a competitive salary involved as well. Hopeful tech entrepreneurs are a dime a dozen. Skilled developers are like hens teeth.
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Damn - I must print that entire post out and hand it over every time I get into this. I especially like the quoted bit.
 
retromodcoza said:
I've been approached to do this kind of thing on several occasions. Other developers I know have refered to it sarcastically as the "pesky problem of implementation" with a startup. There's a couple of assumptions you have made which are incorrect
Click to expand...

Couldn't agree more.
 
I completely disagree with retromodcoza, seems like he hasn't run a business. The developer is the commodity in this situation, not the concept. 20% is generous for a developer who has to contribute nothing but time to the project. There is an opportunity for someone to invest 2 weeks of their lives to a project, and they might just get funded. That's worth taking unpaid leave for if you have a flexible enough schedule.

Good luck Mitch, hope you find someone.
 
retromodcoza said:
Without the developer you have nothing. Without the entrepreneur I can formulate my own ideas and implement them.
Click to expand...

If I had a penny for every time I have heard this...

You should rather just say that you don't want/need to build a startup.

Conjecture on what you could or couldn't achieve on your own, especially this sarcastic flavour of that thing really just shows an inexperienced, immature human being who has no framework for understanding business.

You are simply explaining why no founder should work with you and why you are a wage-slave/code monkey.

It's a long way of saying that if you "could" then why don't you?

Rather say you don't need or want to, it's less embarrassing for the rest of us.
 
phiber said:
There is an opportunity for someone to invest 2 weeks of their lives to a project, and they might just get funded. That's worth taking unpaid leave for if you have a flexible enough schedule.
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Nowhere near enough for an idea worth anything.
 
phiber said:
I completely disagree with retromodcoza, seems like he hasn't run a business. The developer is the commodity in this situation, not the concept. 20% is generous for a developer who has to contribute nothing but time to the project. There is an opportunity for someone to invest 2 weeks of their lives to a project, and they might just get funded. That's worth taking unpaid leave for if you have a flexible enough schedule.

Good luck Mitch, hope you find someone.
Click to expand...

I have run a business, a tech business, and let me tell you, you get nowhere with 2 weeks. 2 weeks is enough for a prototype maybe.

Do you have any development experience?

If you look at how much each partner is investing, and the amount of risk being taken, you will see why 20% is nowhere near enough. The developer will spend months of his life working on this project - how much could he get for that at fair market rates?

Let us say a senior developer can go for R350 per hour (or more, but let's use R350). R350 times 40 times 4 is R56000 per month. 6 months of work and you owe the developer R300 000.

How much could this guy get for the business if he sold it right now, with no development work done? Answer - pretty close to zero.

That should tell you how much value the developer adds to the business.
 
phiber said:
I completely disagree with retromodcoza, seems like he hasn't run a business. The developer is the commodity in this situation, not the concept. 20% is generous for a developer who has to contribute nothing but time to the project. There is an opportunity for someone to invest 2 weeks of their lives to a project, and they might just get funded. That's worth taking unpaid leave for if you have a flexible enough schedule.

Good luck Mitch, hope you find someone.
Click to expand...

Two problems with this :

1. The developer will be contributing months and/or years to the project. Not two weeks.
2. The developer is not a commodity. This is the kind of thinking that ends up with the KZN billing system running 500% over budget. You are paying for the developers thinking , not his ability to code. This cannot be standardized.
 
SlinkyMike said:
If you subscribe to the concept of delivering working software in small iterations to facilitate the process of validated learning and your dev cycles are longer than two weeks you're most likely doing it wrong.
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We're not talking about a dev cycle, but the entire lifespan.
 
WhichVoIP said:
In return for development of this idea, he is looking for someone who will do the development in return for 20% equity in the business. Should the investors not select the idea this will still be pursued and brought to the market nevertheless.
Click to expand...

20% of nothing? I pity the fool who will go for this deal. I've been there in my late teens and built many a Facebook killer or clone that went nowhere. SMH!
 
SlinkyMike said:
If I had a penny for every time I have heard this...

You should rather just say that you don't want/need to build a startup.

Conjecture on what you could or couldn't achieve on your own, especially this sarcastic flavour of that thing really just shows an inexperienced, immature human being who has no framework for understanding business.

You are simply explaining why no founder should work with you and why you are a wage-slave/code monkey.

It's a long way of saying that if you "could" then why don't you?

Rather say you don't need or want to, it's less embarrassing for the rest of us.
Click to expand...

I did not decide any of this. The market did.

Oh - and I have - with a good degree of success.
 
Is this on spec, i.e. is there any payment apart from the equity share? As someone who has been involved in far more of this type of spec development than is sensible, I can tell you that I have (almost) never seen any of them pan out.

The reasons are many but here are some:
- No matter how much the research shows that there is a market, execution is king, and great execution generally requires far more effort than is anticipated.
- There is a natural bias to overstate potential returns in even the best business plans.
- The developer has all their time and effort to lose, while the "investor" (in this case) has 20% of nothing to lose.
- Since the development is essentially "free", the investors tend to throw features at it until the scope gets totally out of control and there is little incentive to prioritize and focus on core functionality.
- The "investors" lose interest - e.g. their anticipated source of funding dries up, they discover somebody else already has a similar product, they switch to a more exciting project, come up with a better idea, emigrate, get bogged down in their day jobs, etc etc.

My golden rule - recover at minimum 50% of your time costs, preferably more, regardless of what is offered. So if it's a really good idea that you really really believe in, go for it, but insist on some kind of (discounted or at cost) payment in addition to equity, with clearly defined deliverables. If the investors are not committed enough to at least pay something for the development then walk away. Payment forces them to prioritize and ensures they won't lose interest as soon as the next great idea comes along. Trust me, it works out better for everyone.
 
Ancalagon said:
2 weeks is enough for a prototype maybe.
Click to expand...

That is all that one should aim for at the embroynic stage. Anything more risks wasted effort and associated opportunity cost.

ColinR said:
We're not talking about a dev cycle, but the entire lifespan.
Click to expand...

Then we are not on the same page.

IMHO it is impossible to predict the entire SDLC for a startup project, much less at the pre-MVP stage.
 
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