Misfit Founders
Misfit Founders
Avoiding Co-Founder Pitfalls: Lessons with Amber from Vestd
In this episode, Biro and Amber from Vestd dive into the complexities of co-founder relationships, discussing agile partnerships, structuring agreements, and fostering alignment. Together, they share insights and personal experiences on how to build strong, sustainable startup teams.
If you'd like to try out Vestd for Agile Partnerships with your co-founders you're in luck because the team at Vestd has provided us with special discount codes 😍
- Use code MF10 for 10% off any subscription for 12 months
- Use code MF50 for 50% off Essentials plan for 12 months
⭐ Visit https://www.vestd.com to learn how the team over there help startups in UK.
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We're doing things a bit different. We're not having our regular Misfit Founders podcast although it's kind of like a conversation still but there's a topic that I think has come into the spotlight in a lot of my podcast discussions, which is the whole co-founding thing, and it's a I think it's a very controversial. You know, I would call it a soft controversial topic, okay, not full-on controversial. Like you know, do I bootstrap or do I get investment and so on.
Speaker 1:The co-founding, the co-founder topic I have a lot of experience with. Like a lot of bad and positive experience with co-founders. More bad what do they look like Physically? I believe you I'm not making them up Actually been physical human beings. But also, when I talk to founders, I feel that there's a split of people that have co-founders and they don't see it any other way, people that don't have co-founders and would love some because they have to bear the world on their shoulders. And there's also a small portion of founders, solo founders, that they don't see themselves working with anyone else in the co-founding team, and I find that very interesting because I think I wouldn't want not to have a co-founder someone else to be there with you yeah, and you know I'm running a business now masterwork films and I'm the primary co-founder there, but I have a core team that I still call, you know, the co-founders the co-founding team?
Speaker 1:yeah, exactly and I'm like you're quite generous with the term yeah, where some people may be more protective over yeah because I don't know if it feels like if you're on your own it can be lonely, but some people don't mind being on their own and doing stuff. But in the same time you have to handle so many things on your own that it slows you down.
Speaker 1:Yeah that it slows you down. Yeah, although we hear nowadays stories about, oh you know, the first business that reached a million in arr, we're just a solo founder with no team and whatsoever, because technology and stuff yeah but I think in general it is quite difficult to build a lucrative business um on your own fast both physically and emotionally. Yeah, exactly yeah, and you can say well, you know, you can rely on your, you know your partner, your family from for emotional, um kind of like um emotional support but they don't quite get.
Speaker 2:It is in the way that a business partner, a co-founder, yeah would get it in the same way. That's the thing right.
Speaker 1:So it also depends on who you're talking to and what kind of partner, because, like, for example, if, if your partner does not care of that subject, that industry, that topic? If they don't know about it they can kind of like pet you down right, like it's okay, so you'll be fine and stuff, but they don't understand it, or they don't.
Speaker 2:Reality is it might not be fine, yeah yeah, exactly.
Speaker 1:Um, so I'm I'm not on the fence, I'm 100 on the side of if you can get a co-founder and work with someone that can help you get the business where you're supposed to. And, even if it's not in the shape of a co-founder, get advisors, bring people on that can help you build that business up and people with experience in certain areas up and people would experience in certain areas, because the building a company, a business, in whatever industry, is a complex piece of machinery, like working machinery. You have a lot of components. You can't be an expert in absolutely everything and, yeah, you can hire people. But and I keep on saying this to people and it seems like some don't really get it which is your team? Your employees will not care as much as you care, and your co-founder or your shareholders, stakeholders, will care about the success and the well-being of your business.
Speaker 2:Sure, they will care Right, but not as not staying awake at night as you do and I guess it also depends on how, how the business even starts right, because sometimes there'll be a natural co-founder relationship that emerges from, you know, those conversations with, say, a friend, family member, acquaintance, whoever, and you realize you have that in common. So maybe then eventually you'll start to build something together.
Speaker 1:So, like the, I guess the organic, yeah, that's and that kind of like takes us to the next topic is like okay, you decide that, um, you want to build something with someone. How, who do you partner up with? How do you get them? And you're right. One of the probably the perfect case scenario is you have someone in your life be it in your personal, professional life, that you've been dealing with, working with, um partnering up with, collaborating with, and eventually it organically goes towards we should start something together, or you're sharing the same. You know you're sharing vibes and thoughts about this specific topic. You're quite both of you are quite passionate about it and eventually decide we should build a business around this yeah and that's quite organic.
Speaker 1:The risk there is, if you do it, if if you have that conversation, that moment of we should build something around this with someone that you've never worked with before or collaborated with in a professional setting before, that excitement, that ecstatic feeling at the beginning will slowly fade away.
Speaker 1:You know, it's, it's, it's the reality of it, right, you're always going to have that feeling of, oh, this is my thing, this is my business, my baby. But over time it becomes a job. Every single startup in the early days is like this exciting stuff everyone's doing, oh, we don't care about. You know what the terms? Uh, rules and stuff, let's do, let's do stuff. This is so exciting but eventually, as your ducks get into role when it comes to um having a stable product, um starting to get to market fit, um starting to get customers, and so that becomes a job, it becomes your role and it becomes it feels more like a job than the actual, you know, hacking, hacking and playing your playpen type of stuff. So then you reach that point and by the time you reach that point there's a high risk that you realize I'm not compatible with my business partner.
Speaker 2:Sure. Different work ethics, yeah, approaches to.
Speaker 1:I think we're stepping on each other's toes. Yeah Right, that's one work. Ethics, yeah, approaches to. I think we're stepping on each other's toes.
Speaker 1:Yeah, right, that's one. And then you know you might also not have placed the proper terms from the from the get. Go with them and you wind up kind of like feeling resentment because you're spending way too much time invested in this and they're somewhere out there. You know, sometimes putting some time, sometimes just being um, ami, right, um, am I? Am I missing in that? M m I a missing in action? Yeah, yeah, I'm so terrible with acronyms.
Speaker 2:No no, it makes sense. But yeah, of course, like when you're in the, in the wraps of setting up a new, really exciting venture, something comes with all the challenges, um, alongside that at the beginning of the journey, yeah, who's thinking about? About the relationship?
Speaker 1:yeah, and that's why I said I had, um, good experiences and terrible experiences. And good experiences, honestly, so far have been two. Yeah, you know, up until up until recently I kept on saying one because it was the company that probably a lot of people that watch Misfit Founders and have been seen know. My story is Jexo and Nikki, my life partner, which we built a business together and that was the first time ever that I've had a co-founder that I got along with. Sure, we did have a lot of our differences and such, but we were. We worked together previously, so I knew how we operate together, our work dynamic, so we've kind of like applied that into our business as well. And then the. The next one is masterwork, where I have a couple of team members that are kind of like my co-founders. Then finding a co-founder that I really work well with, nikki, putting together a team that was really the right team. In a sense kind of aged me in understanding what I'm looking for in a business partner.
Speaker 2:Yeah, it's fast track, yeah exactly in a business partner.
Speaker 1:Yeah, it's fast track. Yeah, exactly. And also, you know, I think I'm at a stage mature enough to know that, even if someone looks perfect, I still need to lay down the house rules. Yeah, have those conversations, yeah, on how to operate. Yeah, and and and really establish a work um, a frame for working with each other.
Speaker 1:Make sure that you're compatible. It's two simple stages to this. One, make sure that you're compatible with the personality, skills, work, dynamic, exactly. And then, second, set the house rules. Second, set the house rules, so lay down in a written legal agreement what the the two or three or four of you are responsibilities, effort, time, input and so on will be, because that's your secret recipe to um, to basically ensuring that you have a successful marriage with your, with your co-founders the secret sauce the secret sauce secret and the thing is that, like there's, there's quite a few examples out there of not doing that and still being successful statistically, it will happen sometimes that the natural perfect combination will come about um or without having to have that intention baked into your to your well co-founder strategy.
Speaker 1:But chances are it's less likely, I would say without conscious effort and you know what the thing is that I think, I bet you, that a lot of co-founders don't even realize that their, their business, their startup, is falling apart because they're not compatible, because not everyone's so self-aware right to say they think it's their, they think it's their business idea, they think it's their product.
Speaker 1:Yeah, they think their team maybe yeah their team, or that they think that they didn't took the right decisions in terms of, um, you know, funding certain initiatives and so on, and they're not looking inside exactly and deep down down inside.
Speaker 1:It might be just the fact that you know you might have one co-founder that comes up with some strategy ideas and the other co-founder is a yes man, okay, right. Or you both have the, the same skill set and and you're not covering a wider ground of skills, and you live in this bubble of because you're not, you don't have the knowledge of, you know, you don't know what you don't know, right? So you live in this bubble and you're like well, we just fail because you know things didn't work out, we didn't do ABC, things didn't work out, we didn't ABC. But you're not realizing that well, we didn't have the skill set and the knowledge between the two of us to do this, to deliver this.
Speaker 2:I mean, what's the point in having having co found who's the exact copy of you, right yeah?
Speaker 1:But that goes back to what you said. You said, which is like the organic way, which is people saying, oh, we were passionate about this topic, let's just do it. And, and I see that and I've had so many examples. I remember, when I was working in the software engineering world, of two software engineers coming up with with an idea and building it. But they both had the same skills. No one did marketing, no one did sales. They build it and I'm and I'm guilty of that building something and just putting it out there and and hoping for the best. Yeah, but you don't realize that you're not compatible with your co-founder. Oh, you might be compatible because you, you share the same skill set in a sense, so you're friends. So you realize, well, we're compatible because look how passionate we're about this, the, the trait that we do. But the reason why you would get co-found, the main reason why you would get a co-founder, is to help unload some of the stuff, some of the, those components of this complex mechanism which is running business, and share that.
Speaker 2:And if none of you want to take some of the other stuff the marketing, sales, the people, hr, hiring this and that then yeah, I mean, you think of it like, well, if we're talking very generally, there might be someone who's the face of the business, the the face of the brand, and then there might be the one who's that yeah, so that's the people person, the communicator, um, and then there might be the brains behind it although I would say both of them are the brains, but, um, you know, maybe the one that's more technically minded, the one that's building, say, if it's a tech platform or or anything more more physical, um, and I think that, yeah, excelling in both of those areas is fairly rare, and often that's when co-founder relationships, um, co-founder partnerships, are the obvious choice yeah filling the skills gap um or enhancing each other's skills um yeah
Speaker 1:implementing each other's skill sets you should always have the bare minimum is your technical individual and your sales individual. That's the bare minimum that you should have in a team and, honestly, most of the time you could do without the technical.
Speaker 2:You think?
Speaker 1:Yeah, because, especially nowadays with technology with no code, low code, you can hire a team remote somewhere to build. I don't usually recommend this, for some like for you to have a co-founding team that doesn't have, that has zero technical skills, and you're building a technical product, right, yeah, it's, it's a bit of a recipe for disaster very more often than not, but it's not impossible to do, yeah, whereas the other way around is a lot harder. If you only have technical co-founders and no sales and so on, well, you have to start somewhere, you have to start selling. And how are you going to do that if you don't? Because you can't afford to pay, especially for an early start.
Speaker 2:We can't afford to pay a, a consultant, an advisor in sales and maybe expect for them to have the same level of knowledge of the product that you have once you built it yeah, so it's a lot harder if you're technical and you don't have a sales and marketing counterpart.
Speaker 1:It's still not preferable, but I think it's easier if you're sales and marketing and not have the technical part. I know that's that. That's going to probably rough some feathers out there, but that's the reality of it yeah like a good sales.
Speaker 1:Like a good salesman can sell anything yeah, right salesperson yeah, sorry, a salesperson can, can, can, sell anything. But when it comes to having that and I've kept on making this remark because I was there I was the technical person that had no knowledge of how to sell and how to get discovered as a solution, and I kept on making this analogies, you know, being building a product, being the technical part and not having any marketing and sales capability is like having the cure for cancer in your bedroom but having no idea how to share it with the right people yeah right, it's, it's futile lots of potential and yeah, but I think with how you get your, your partners and I've talked I don't know if you have any thoughts on this, but I've kept on recommended a pro, recommending a process where you actually go through a similar process with your co-founder, like you would go through um, a hiring process with someone, which is you have various stages of discovery yeah
Speaker 2:to get to understand if the two of you are compatible yes, I I I hear of this referred to as like co-founder dating yes, so say if it's not in that organic way where it's you and as someone in your life who you've decided to go on this adventure, with this journey, with it's someone who maybe you've met, um in the, in, you know, at an event or some some, some some other way um, where you're actively looking for your co-founder um, yeah, co-founder dating. So what standing each other so?
Speaker 1:you've you, you know of the co-founder dating. So what? Understanding each other? So you know of the co-founder dating process or whatever method. What kind of stages of that is? Because I've kept on recommending this before even hearing the concept of co-founder dating and I'm curious if it's the same thing. So you basically meet someone and then what do you do afterwards?
Speaker 2:yeah. So obviously, from the get-go, from that initial conversation, you'll have a judge, a judgment, uh, you'll get a sense of their vibe, um, in that setting, in that particular setting. Maybe take it out of that setting something a bit more relaxed, more informal. Your coffee, your trip to the pub, um, in a different location, yeah, different, different environments, um, and you'll see different aspects of their personality. See how you get along, you know, is it, is it natural, is it something where there's something there but it might need, you might need to decide on where you draw the lines with each other. You know if there's going to be someone who has a final say or not, um, kind of navigation. And then there's also having those tough conversations straight up, because it's easier to have the difficult conversations before you enter this than to leave it too late and then you don't know how to, or you don't know maybe their communication styles, how they take on feedback, how they give feedback.
Speaker 2:read feedback criticism, creative disagreements um, I think having the tough conversations.
Speaker 2:Using the analogy of the, the marriage prenup right, the co-founder prenup um, saying this is the way that we're going to do this. Um, I also liken it to like learning styles. So you know, someone's a visual learner, someone's an auditory learner. Um, say, I'm I. I work in this way when it comes to conflict. I work in this way when I want to give feedback when I have disagreement. So having those conversations early on, I think, is a very important part of dating your co-founder yeah, lack of a better term oh yeah it.
Speaker 1:You. You should always be super transparent and have discussions and conversations about specific key attributes and collaboration, kind of like touch points, right that that is, more often than not, not enough, and the reason why is I'll give you an example.
Speaker 2:Push them in at the deep end.
Speaker 1:So you have to test the waters, because conversations are great, right, but I can tell you the amount of times that I was sitting down, know, sitting down with someone and we were talking about doing this thing and, oh, let's have a couple of conversations, which is great to see how we would do it and see which, how we would work together and so on. But when you're in the midst of it and you're excited about an opportunity and potentially doing something together, you kind of you tend to it depends on the person, right, but some, like myself, tend to oversimplify things, right, and and think that certain aspects I'm okay with and the answer to some questions might be skewed and different just because I'm in that euphoric moment, right, you know, like white lies and things like that. You know, when you start dating someone and you know they say, oh, I like I don't know horse riding, yeah, best thing ever, right, yeah, I don't know horse riding.
Speaker 2:Yeah, Best thing ever right.
Speaker 1:Yeah, and you're in that euphoric moment You're like, oh yeah, I like that as well. It's cool. And you've not horse, you haven't done that ever. Yeah, you might not even be interested in it, but because they're interested in it, you might be interested in that.
Speaker 2:It's that kind of like effect that um, um in love effect.
Speaker 1:Right that so many of these funny analogies we're using here? But yeah, yeah, but it's the same thing for the.
Speaker 1:That analogy applies to co-founders right it's because, especially when you're talking early about the whole, I'm so excited about this, yeah, let's do this, and so on. Right, so it might be the same, because if you're going to networking events and you know you meet interesting people and you take them out for coffees and so on, right, so it might be the same, because if you're going to networking events and you know you meet interesting people and you take them out for coffees and so on, if they say yes, if they, if you're kind of like telling them about potentially partnering up for an idea, they might get excited and so on. And then you also don't know that person that well and they might say things just to be more likable. Might say things just to be more likable, um, you can still kind of like see signals, cues, verbal um cues and emotional cues that you can extract from conversation. But it's very it's easy to miss.
Speaker 1:Yeah, yeah yeah, exactly, you have to be a bit of a psychologue to to be able to sat there and analyze that person and say, oh, actually I don't like because they raised their eyebrow like that when I said that thing, right. So I think there needs to be practice, and I think this is one of those stages that are a bit more cumbersome, but it has to happen.
Speaker 2:Yeah.
Speaker 1:In order for you, for both of you, to make sure that you're compatible, work on a small prototype, work together for a month, right, it's a big decision that you're going to take to sign papers with this person and open a company with someone that you met a couple of times and you've spoke and you seem like you vibe off of each other, but it's a big.
Speaker 2:It is Going back to the marriage analogy and people referring to their business as their babies. It could be seen as like a marriage, like creating a child. But it's also so much more than that. As you said, with you know, the legal aspects to it, you're often, you know, obviously, incorporating company together, becoming, you know, jointly responsible for this thing, often in some ways, like you know, financially, you know financially interdependent somewhat tied. It's a huge commitment.
Speaker 1:It's not something that you, you know, depending on the conversations, might be off the back of the napkin kind of kind of calculations, but really it has to be done intentionally and it's funny because you know when it comes to um because we keep on doing this analogy with romance but you know when, when it comes to your life partner, you spend quality time in figuring out if they're the one, but when it comes to business, you jump in bed with, with, with someone and and basically get married to them the next day, which is which is kind of like crazy to think about. Right, this is you know. Yeah, okay, it's their life partner. It's a lot more important, but your business partner is is important as well, to make sure that you get the right person, because beyond just yourselves, right, if you grow a team yeah that team is also dependent on your co-founder relationship.
Speaker 1:Yeah, exactly so. So not only that, you're impacting, potentially negatively impacting, the next five years, ten years of your lives, right of the two of you or three of you, whatever, how many business partners are the team, but also team. Yeah, exactly so your investors yeah, so you're, that moment in time when you decide to put the two of you together can have like a crazy ripple effect.
Speaker 1:Yeah, yeah positive or negative. So then, why rush into? That's why that's why I feel like a lot of especially young startup founders. They rush into things oh, let's do it. Or incorporate the company, put, sign off, do this, this, this, let's do it. Let let's push a prototype out there, let's see what people think. We're partners, and so on.
Speaker 1:Take the time to figure out if you should be doing this with this person, and you can do that again by running through an exercise right daily or every two or few days with them, um, collaborate prototype stuff, sketch um, assign tasks between the two of you, keep yourselves accountable, see how that kind of like collaboration, that kind of like relationship works, and not just on the on all of the phases of, let's say, the life cycle of whatever you're building, a product or whatnot, so from because it's cool to be like, oh, let's do, let's do a workshop together where we come up with solutions and you might be vibing off each other in that workshop, oh yeah, we should do this, we should do this, we work so great together. But then, when it comes to the execution part, you realize that you bump heads all the time. So you have to do this kind of like engagement period. Yeah Right, for a period of time where you go through all of those phases.
Speaker 2:Knowledge. You could go on forever.
Speaker 1:Yeah, exactly like it's the same thing, like, for example, you know you're getting, you're getting married and you never lived with your partner.
Speaker 2:Yeah, yeah, so I also I'm wary of the other side of this. In the often especially, you know, younger, less um less experienced, um early stage founders, you could say, um, you know there's, there's also I mean in any case actually there's that time pressure. They want to do it before anyone else does it. They want to do it, I guess, to an extent, while it's still fresh. So striking that balance between harnessing the enthusiasm and the, the drive and the desire to to do it before anyone else is doing it but that's always a bad thing though, is it?
Speaker 1:yeah, but, but that's why first mover if you're in a rush, rather than co-founder dating, pick that one person that you know you can work well with right, someone that you worked with in the previous company with and you know you worked really well together um, someone in your family or your friends group that you've collaborated on some I don't know some, some hobbies or some some stuff that and worked really well. You worked really well together. So I'm not saying that that's the only, but if you don't have that option, then you need to spend time and not super rush into it, or by all means go ahead and rush into it, but be aware that there is a significant risk that you incur by doing that.
Speaker 2:Yeah, I've got to make sure that you're playing to your partnerships strengths and minimizing the weaknesses.
Speaker 2:Um nikiko calls it the competitive advantage that a great partnership can bring to your business oh yeah if you, if you, if you harness it right, then it, yeah, it can be, it can be part of your usp. But, um, and then the other side of that, as you were saying, you know, if it's a friend, if it's a family member, if it's an old colleague that you know you might now call a friend, um, it's the danger zone of of that relationship, risking that relationship.
Speaker 1:Um, when you build something, yeah, it doesn't quite go to plan but then that the next step, the next phase, comes, um, comes into play, which is make sure that you set the house rules right, and we're not talking here about, you know, verbal, yeah, I do this, you do that, um, and we agree to spend, you know, a part-time, for you know, 20 hours per week each, okay, yeah, yeah, cool, cool. No, and this is hard for some people, right, because and I've talked to people and the first question about this and the first question was like how do I bring this about? Because, especially if you're talking about friends, family, um, ex-colleagues and so on, people you hold hold dear.
Speaker 1:Yeah, if you, there's a chance that, if you raise the not the concern the topic of, let's put together a legal agreement between the two of us that lays down the rules.
Speaker 1:Each spends this many hours per week on our business.
Speaker 1:I have these objectives, you have those objectives, and so on. That it might be seen like, oh, but what? Do you not trust me? Right, and that's the one thing that I've kept on getting from people that I talk to that want to start a business with someone that they know, start a business with someone that they know, but they're a bit shy of going with a legal document to them and saying, because they're concerned that you know, the individual might think that, oh, you're insulting me because you think you're not trusting me and stuff, which, again, I think they're overthinking it. I think a lot of them are overthinking it because you know it's a legal document with someone that you know. But I don't think a lot of people will mind that Because it's the delivery, it's how you position it. It's not like, oh, I don't trust you, but like, hey, we need to make sure that you know you're protected yeah, protected, yeah and that we don't get into fuzzy waters later down the road, because we didn't really agree on who's doing what.
Speaker 2:It's that. It's the. It's not that I don't trust you, it's the uh, the. I I value you, I value the friendship, I value the relationship. I want to protect this because that's, you know, something that you know that person holds dear.
Speaker 2:Um, and yes, when you talk about in the, in the analogy of the prenup, you know, just like before you, before you get married, you might think, oh, do I want to do, I want to start on this kind of foot, talking about if things go sour. But, um, I, I believe many people do say it can be a good idea, um, but, and when you mention, like you know, the legal agreements, I think that that can, it can scare people because of the well, how we we view, we view lawyers and the law, and um, keep keeping everything in a particular way. Um, but that's where you know, the flexibility of a task agreement can come in an agile partnership whereby, if, say, you don't necessarily deliver on everything that you've committed to, that's OK, because your, you know your reward, your responsibility, your equity, based on that, delivery is adjusted, is adjusted depending on what you deliver and I think that's what, and you're right, that's a very important topic.
Speaker 1:I think a lot of people think, when they think of agreements is like when, when I'm bringing you agreement, oh, your role is this and your responsibility is signed on the dotted line.
Speaker 1:People think, well, hold on a second, because what if I sign and we dispute and I lose all of my yeah, but. But that's not the case, because with um agreements you can set up a structure where over time, you get allocated some of that stake in the company, right, and it's just like, let's say, six months down the line, you've had 20, 30 of your of your um stake in the company already allocated. So you have that yeah, um. But if, let's say, at that point you're like you know what, I don't want to do it anymore, or I'm not being able to handle these things, I have other commitments and and so on, if you set the agreement right, you're still left off with that stake that you've worked hard for. I think that's one of the things that people don't realize a lot of the times when they're presented with an agreement, of rules, and they think, well, if I sign this, what if I spend one year, two years and after two years, something. Something happens and I lose everything. But it doesn't have to be like that exactly.
Speaker 2:It doesn't have to be all or nothing, and I think often it's better when it's not all or nothing. It can be any part in in a spectrum. It can be zero, one, two, three or four, right?
Speaker 2:yeah five out of five. Um, but yeah, definitely, as you say that that conversation has to be a part of it. You can't just give someone the rule book and expect them to respect that. Yeah, especially if they are equal, if they are co-founder or you know close to your equal part of your co-founding team. Um, I always think, respect, give it, get it. Um, if you want your team to respect you, you have to give them that as well. And so, bringing them into that conversation when you're setting out the rule book, um, those ground rules, yeah, it's um, it's a good thing to do collaboratively, although, of course, ultimately, there's usually one person who has the the end, their final say.
Speaker 1:You mentioned agile partnerships, right. I think a lot of people when they think of, oh, I need to do some sort of legal binding document, slash contract, slash agreement with the co-founder they think about it like that. But there's this concept of agile partnership. What? What is agile partnership document actually?
Speaker 2:so an agile partnership is a task agreement which is tied into conditional equity. It's a lot of jargon there. It basically means that you can set out what your responsibilities are often as a co-founder, but sometimes as the early founding team as well um such that you earn the equity as you deliver on those particularly pre-agreed um tasks agreement.
Speaker 1:Yeah, yeah, exactly so.
Speaker 2:It means that you can go into things with the best intentions and hopefully you come out with it with what you expected. But if something happens, something changes, life happens, things change. Your idea pivots for, for that, for that matter, um, life's not predictable. It's good to be agile and, um, if you have the kind of structure which allows for that, it can be very powerful and also, very importantly, protecting the relationship, protecting the business as well. Yeah, if, if someone doesn't deliver on something, that's okay, because they're not then being rewarded for something that they don't, they haven't earned.
Speaker 1:Um, so it reduces that kind of, you know, potential for bitterness and things going sour yeah, it's, it's um written you know, pen on paper, ink on paper, how they say it right digitally usually, but yes, yeah, um paper but I think that's that's very key, right?
Speaker 1:so you have a set of tasks in that agreement, or objectives, goals, um, that deliverable exactly I think deliverables is the right word here um, that you commit on delivering, um, usually by set time. I think it's good to have also marks, like time marks. Yeah, you know, in six months from now, you, as a co-founder, would have delivered X, y, z, and then, in six months from then, you'll be delivering this, that, that, and then, like breaking down the stake, the shares distribution that you have into those time box based on your achievements at that point. And it's quite flexible, right? So I think that's why it's called agile partnership, so you can set up a variety of rules. But the one thing that I found because I've done this recently and I've done it through Vested, and we'll talk about that in a bit, and I've done it through Vested, and we'll talk about that in a bit but I think the one thing that I've been advised by your awesome team at Vested was to be as specific as possible and not very fuzzy about the rules, because if you're fuzzy about the rules, your interpretation of done might not be the same the different person's interpretation of done, of a task or of a deliverable being done. So the more specific you can be on those tasks, the the better.
Speaker 1:Now it's also yeah, exactly, it's also. It's a weird balance, because it's a weird thing to balance. Um, what I mean is because when you start with a co-founder and this is from experience you start planning certain tasks and in one month from now, half of them change, become irrelevant, irrelevant, change to something else, and so on. So I'm curious how do you handle that? Because, like, for example, for for me, I think it was very specific what my um founding team, um, what the responsibility was there? Because we're not, you know, in this um with masterwork, in this startup, um, innovative, fast pace, everything changes overnight type of business. It's, it's a lot more. It's a, it's a path, yeah, it's, it's a path that you take right, but a lot of startups are not like that, yeah, yeah, yeah, exactly.
Speaker 2:And the path for each, each business, each organization, each journey is going to be different. Um, and I would say that, yeah, timing is important. Um, in most of the kind of um you know, those startups that we're referring to with a huge amount of variability, it's unlikely.
Speaker 2:It's a good idea to set these things up um you know on on day one, um, but you know still still fairly early on when you've got a feel for you've had these conversations who's going to be responsible for. You know your technical side, your marketing side, your sales side, your team management side, when you have more of an idea of these things to be fair, team management, that might be later down the line when you've got an idea of those base responsibilities, that's when you can start to put these things into an agile partnership. It could be two months in, could be six months in, could even I wouldn't say a year in. I think that's too late, but bearing in mind that it's it's, it's flexible. It doesn't have to be exactly as you want it to be. It doesn't have to be exactly very specific in day one.
Speaker 1:You mean exactly and cool. So what happens, for example, if? If so, what happens? Let's say, if you don't set the rules very specific rules, from day one, do you still put together a agile partnership from day one, or do you delay agreeing a stake with a co-founder until later down the road? And then, if that happens, that means that they might be doing some work where they don't have, like, the assurance that they're going to get anything for the work that they do.
Speaker 2:Yeah, I would say that you start thinking about these things, even subconsciously. From the beginning.
Speaker 2:You start thinking, ok, this person is going to be doing that, I'm going to be doing this, we're going to be doing that, doing this, yeah, we're going to be doing that. Um, and then some of that as well. When you say about doing things out that is outside of what may be in that task agreement, it doesn't have to be confined in that way, and oftentimes the the journey of a founder that the role of a founder co-founder will vary so much from what you initially think it's going to be. Yeah, the and and again. When, when the overall business growing, that is the aim people are more likely to do things that are outside of, say, potentially that remit. But, um, yeah, I would say that early, early on, from day one, you'll be thinking about these things, whether you realize it or not yeah um.
Speaker 2:The sooner you can you can put it into a common agreement together, the better I think it's.
Speaker 1:It's also there. There's a chance that it depends on the type of startup business. There's a chance that in the in the early day, everything is so hectic and so random that the only way to set up an agreement with your co-founder is to have something that's more related to achievements rather than specific deliverables. Right, it's gonna be a bit more fuzzy, but in the same time it's difficult if you're in that space where you know the. The other thing is you don't want to tie yourself into very specific tasks and you realize but we don't need to do those tasks. Oh, but I still need to do them because they're they're irrelevant, but I still need to do it because of the agile partnership. So it really depends.
Speaker 1:But there's two types of startup businesses I see. Often it's ones that are very hectic in the early days, in the exploration and discovery and concepts and prototypes phase, everything is so chaotic. And then there's the other, on the other side, their businesses, their startups, where they know they need to build the mvp. Yeah, they know what they need to do for the next six months.
Speaker 1:Afterwards it gets a bit fuzzier yeah so for those, I think you're in in a position where you can set specific deliverables for the next. For the first, it basically for the first wave of the of the shares, the stake that each of you get. It's like, well, in six months I'm doing this, you're doing that and we're gonna get um allocated this much equity from the pool, and then for the next six months it might be a bit fuzzier and that's do more you can um tie it to even, just like you know, simple time-based metrics yeah, oh from.
Speaker 1:Yeah, you're right, so you can do like oh well, we don't really know what exactly tasks, deliverables we're gonna have after six months.
Speaker 2:Let's just put it into we each spend two hours per day um working on the business yeah, or we're each contributing to this in whatever ways that we've agreed yeah for the next three years, for the next two years, for the next five years, um, but yeah, I would say as well, going back to the conversations that you have with the co, with your co-founder, when you might be dating them, whatever um, having an understanding of what they see over the next five years, over the next 10 years. Being brutally honest, um, unreservedly, unreservedly honest about what you want to get out of this venture, what it means to you, what you know what other variables there are in your life as well. Um, these are all the things that you've just just got to be open about, got to talk about and that saying of it sounds too good to be true stands here as well.
Speaker 1:When you're, when you're, co-founder dating, if, if one of you or both of you or y'all constantly talk excitement and yeah, and it's going to be like this, and and and everything is rainbows and skittles, uh, I think that's that's a bit too. That's that's a red flag, right? So if you don't think of what could go wrong with your business and you don't go through that risk assessment conversations, then that's not a very mature first kind of conversations that you're having.
Speaker 2:How do you expect to have them later down the line, when things are difficult?
Speaker 1:Yeah. When you can't do them, if you can't do them now when things are easier and things are exciting and you should, because then it kind of grounds you as well. Rather than going at this with your you know, take me business world right and plunge.
Speaker 2:Yeah.
Speaker 1:You're actually a bit. If you're having that risk assessment conversations, you're actually threading a bit more careful. Okay, I'm more calculated about certain things. That's important. Made a bit of detour here, but I wanted to get to. We talked about agile partnerships. Bit of detour here, but I wanted to get to. We talked about agile partnerships.
Speaker 1:Sounds like you know the perfect type of agreement for co-founders and whoever in leadership or, you know, advisors of your business. Perfect type of setup to have. I have them with Masterwork. I have them with masterwork. How do people get into agile partnerships and these kind of agreements? Because when I think about it, right, when you tell someone, well, you need to make an agreement where you lay down the rules and the allocations of shares, over time, you know of a sudden gets what I say gets muffled and people think legal costs, legal costs, legal costs Because it is right. So it's something bespoke, it's not like something. You download the template from the internet, an agreement from the internet, and both sign and you have no idea what you signed because you just downloaded a template from the internet, right, right, so how?
Speaker 1:and I don't know the answer to this because I'm using the disagreement but just let's talk a bit about um, your option, your, I would say the the less expensive and less. Oh, what's the word? Hassle? Yeah, the less hassle, the version with less hassle, frictionless, a bit less friction. Let's call it less friction because when you're sitting down with a lawyer and so on one of the things that I've noticed you work with a lot of lawyers at Vested and so on. You have to because you're setting up all of these systems and so on. I don't know if you personally, but have you ever heard of this story? Or have you ever heard of this story? Or have you ever experienced where you're sitting down with a lawyer and you're asking them a solicitor or whatever, and you're asking them to explain this specific clause in the agreement for you to understand it, because you don't understand it because it's lawyer jargon. And they explain it and you're still confused.
Speaker 2:Yeah, I think that people want to be absolute. They don't necessarily want to add anything, inference or um additional, additional material if it's not there. You know highly technical people. Is that what you mean?
Speaker 1:yeah, yeah, because I've, like I you know I work with lawyers, corporate lawyers and all sorts of lawyers and um professionals in in the legal world and again it's, and again it's. Every single time I need a sit down to go through something that a lawyer wrote, be it my own or the opposite party wrote um, and no offense like lawyers are.
Speaker 1:They have a purpose and they're you know, if we, if we, if we would be living in a world without lawyers, we would be scary. Well, it would be a dystopian world, right, fair to say. If we didn't have, um, the ability to interpret a legal system and so on, it would be terrible, but um, what I'm, my point that I'm trying to make is um having back and forth conversations, emails, calls constantly to get an agreement nailed down and for you to be confident that you have that agreement nailed down can be cumbersome quite often absolutely so.
Speaker 1:So that's why I'm saying let's talk about what Vested does, because I'm using Agile partnerships on the Vested platform and I've been using Vested before. You even had Agile partnerships and so on for the distribution of share options at Jexo back in the days. So what is this Agile Partnerships feature on Vested platform and maybe just a quick introduction of Vested overall, and how does it help founders?
Speaker 2:and startups yeah, of course, vested with the ShareTech platform for startups and more um, but particularly when setting up conditional equity agreements. So your share options when you want to reward your team, your um yeah, your, your co-founder, um prenups, aka agile partnerships. So when you're attaching equity shares or share options in the business to deliverables, be these particular milestones or time-based vested helps you do that. We have our two-way api integration with companies house, which makes it very simple, and we're also authorized and regulated by the financial conduct authority, so you're in safe hands when you're doing it with. Vested is the spiel.
Speaker 1:But and I think some of some of um my audience here would find that very familiar, because we had, if the your co, your founder, he's a founder, he's not a co-founder um, so he's one of the co-founders?
Speaker 2:co-founders, okay, um, but he's our founder for the most intents and purposes.
Speaker 1:We had ifty on misfit founders podcast and we talked quite a bit about his journey into starting vested and and I think it's a it's it's a brag right the fact that you were the first regulated business in UK to do these sorts of activities and tasks, which is you know. You said share tech and I want to elaborate and explain that a bit for maybe people that are like share what? For maybe people that are like share what um you're referring to, um having a platform that automates a lot of the having access to a platform that automates a lot of the um legal, logistical, um tasks of you generating shares in your organization exactly, exactly did, I did, I made it, just as the way I'm explaining so I think so, um, what's been built by the team makes it really simple for founders, early stage businesses, as well as more more complex, um, uh, late stage businesses, smes.
Speaker 2:It makes it simple to do whatever it is you're looking to do with your equity, with your shares. Um, largely, this is built around the company's house integration, because, when it comes to shareholdings, um, the the source of truth is company's house yeah so when your vested account is plugged into the company's house api that two-way api um, you can have that single source of truth.
Speaker 2:Um, so if you have just say, welcomed some investments, you can transfer your some shares. Or, um, you can, yes, you can transfer some of those shares to your investors, or you can create and authorize and create new shares and then have those assigned to those individuals all through the platform. And then in the background, we look after all of the paperwork filings, largely by automation, which then feed through to company's house, making sure that your business remains compliant as you make all of these changes to your shareholdings yeah, that's one of the things.
Speaker 1:When I found the platform, I was like, oh wow, this exists. And I remember this was, this was in um 2021, right, and? And I was, I want. I knew that I wanted to offer emi and um unapproved share options to to the team whenever we were getting new, new people. And I'm like, oh man, I need to figure out a lawyer.
Speaker 1:I talked to a couple of people and then I bumped into vested and I'm like me, the person that wants to do stuff on their own and have access on like, and I was so obsessed at that point. I'm still obsessed with sass tools. Right, give me a good sass tool, that um that does something and I don't need humans, right, so, because it's just that ease of access and we're talking about product led and so on, right, you're on a platform, you do stuff, um, you get stuff delivered and so on. And when you're a startup founder, that is a blessing not having to sit down with an advisor, a counsel, consultant, talk to them, and then having to pay money. And having to pay money here Because you're anyways, you're paying your accountant, you're paying this, you're paying that, you're paying that.
Speaker 2:And then you realize Traveling to the location to meet them.
Speaker 1:Yeah, exactly, to the location to meet them. Yeah, exactly. And you're spending so much time and energy where you know all you want to do when you're a startup founder is decrease as much as possible the time that you spend on logistical stuff, the time and money that you're spending that, and just focus on delivering an early product that's good and makes money right. Yeah, when you're at a different level, then you can start hiring more people to take on some of the logistical stuff. So when I found vested, I was, and you know, um, by all means, you know that.
Speaker 1:I want to make it very clear here on the podcast, I'm, you know, you're not sponsoring um, um, misfit founders.
Speaker 1:I'm not being paid or promoted to say any of this. I just there's a couple of platforms that I always um advertise, even when, when I was working at jigsaw working at jigsaw, working on jigsaw, well, I was kind of like the lowest, lowest paid employee in a sense. So working at jigsaw, um, it was deal yeah, right, have you ever heard of deal? Yeah, yeah, so contracts, agreements with with the team and so on, and also payments online payments, remote made my life so much easier. And then there was vested, which was I can allocate shares to the team, I can increase the valuation of the company based on our numbers and so on, and the team can log in and check their share options that they own and check the estimated value of the shares. And I was like these tools are amazing and especially because I've always been a big promoter of reward your team, so you know I would rather give people equity so they feel like they have vested interest in the company.
Speaker 2:They have a slice of the pie. Yeah, exactly, and skin in the game.
Speaker 1:Exactly. And also for us it was very important that transparency Every quarter we would look at. We also taught our team how to calculate the valuation and so on, but we were also looking at very transparent, with how much money revenue we're making. What does that mean for our valuation? What does that mean ultimately for their shares?
Speaker 1:And you know, a lot of of people, and especially larger companies, frown upon that, but I think there might be negatives, but for me it's it's very important for each individual in the team to understand their work yeah, how it impacts, not how it impacts the company. Because you know, like I think, founders have this, this grandeur thing about themselves and their company. It's like, oh, you're contributing to the company, the company is growing thanks to you, and so on. No, I don't want. I want people to see Because, again, going back, see what they're doing, yeah, exactly how they're impacting their own well-being in the long run, their own well-being long in the long run. Right, so because we're going back to the, the whole idea of you know your team and your employees will not care as much as um as you about your company, because they don't it's, they don't own it right until they're a part of that game, yeah, until the equity piece, exactly, and then their whole relationship changes.
Speaker 1:Yeah, and and when you are able to constantly actively see oh, it has been another month let me see how much my, my stock, my share options, is valued and on the platform you can do that you have. You know you. You know how many um share options you got allocated how many you'll get in the next six months yeah, next two years but yeah, definitely, and I would say as well.
Speaker 2:It comes back to well, equity, inclusion and making sure that it's not just say you know the founding team or senior leadership that have a slice of the pie aka shares yeah share options in the business, equity in the business.
Speaker 2:It is everyone that contributes to growing the value of the business gets some kind of stake in that, and it might not be the same as you know, those, those previously mentioned um groups of people, but it's still something to also honor that as well. Um, in this day and age it is, I think, people become increasingly aware of of, of these kind of matters. But, yeah, so, equity, inclusion big one. Transparency, also another big one. Um, that has been at the heart of what we're, what we're trying to to put into the world.
Speaker 2:Um, but also coming back to that accessibility piece, so, whilst when you have your more mature businesses, they might have all the time and the funds for the, the um, the council, the accountants, etc. Um, we're trying to make this as accessible as possible for your early stage businesses to integrate the equity into their strategy, be it through a co-founder, prenup, share options, share schemes, even through to the fundraising aspect of things. We want to make it as simple as possible for them to be able to do these things. They don't want to make it as simple as possible for them to be able to do these things.
Speaker 2:They don't have to wait for replies from their accountant, at least not in for this particular thing, they don't have to take the time and and the expense of a of a lawyer, um, for these kind of things. They can do it themselves, be it 3 am, middle of the night, that's when they've got their spare time they're're logging into their account.
Speaker 1:I love that. Yeah, I love being able to just go and sign in at 3am and sign off an agreement or doing something like that.
Speaker 2:Maybe not the best time you can start drafting it.
Speaker 1:Yeah, but it's great that you're able to do that. I also wanted to mention it's not a like. So, with a tool like vested, a lot of the the details in those agreements that are templatized, and then you have a lot of options to customize those agreements, um, and you can add certain information and you fill in these forms and you make it the way you want it to be for your team. But you're also not alone on that journey, because and this is one of the things that I love about Vested and that's why I'm bragging I never brag about tools that feel cold and inhuman in a sense, right, but I always brag about customer support and you know people on the other side working.
Speaker 1:I have this ethos about people connect with people, right. So you also have a team like a very well educated in anything HMRC and shares and stocks and so on team that is there to help you. So like, for example, if you're trying to put together an agile partnership with your co-founder and you're scratching your head about some details and the validity of some details, or whether you know, um, what does this specific field means, and so on. If you're fuzzy about certain details, you can also get help from the team at avista, so it's not like fully automated.
Speaker 2:No, we, like you, just do your stuff and we don't care we're equity specialists, equity consultants um everyone has some kind of technical um knowledge and and ability there.
Speaker 2:So, yeah, especially those that you know are on the support team um helping helping our clients yeah um, there is always that human element and, um, that's also a core part of our philosophy the the guided side of things. Um, so, yeah, exactly as you say, if you want to do 90 of it yourself using the automations, then 10 you're getting someone to. You know, give you, have a look over things, make sure it all looks fine. Um, just chatting to them, bouncing some ideas off them, we have the ability to do that and, um, yeah, pretty, yeah, pretty, pretty proud of it cool.
Speaker 1:Is there anything that you want to add to this? Before I close it, I want to make a summary of everything that we've discussed before closing. Anything else that you want to add?
Speaker 2:I'd say thank you so much for having me here, vero, um, it's been been, yeah, great session thank, thank you for joining.
Speaker 1:Again. I wanted to do something a bit more different. I'm going to talk to anyone that's listening, if there's one, two people that are listening and watching. I wanted to tailor this conversation more on the whole concept around co-founding your business with an individual the risks, the benefits and how to go about it. And the reason why this entire conversation was revolved around that topic is because, again, this is the one topic that I find myself talking to founders over and over, either on this podcast or mentors on in person, and it's a very important topic because this could potentially be the rest of your life, right?
Speaker 1:So, being able to figure out what you have to do, need to do and should do around starting a business with someone else we were talking about. This is a partnership, is a marriage, and you want to do, you want you want to do it right. So, from finding someone that is compatible with you and you're compatible with them and you understand that you'll be able to work with them for a very extended period of time, this is the, this is the person that you'll see the most often after your partner, right, and your kids, if you have kids. So we covered all of that and ways of finding the right person and then making sure that you have an agreement, a prenup in a sense, that gives you the peace of mind and creates that level of harmony in your business. And, as we talked with Amber just now, it's not just you and that business partner that gets impacted, it's your team, your customers, your investors, your partners. So it is crucial you get this right. But I think we also live in a world nowadays where you have access to a lot of information. It's not impossible or rocket science to go through a co-founder dating process that's well put together to give you that confidence, and it's not difficult or impossible to put together an agreement between the two, three, four of you that gives give you that peace of mind and harmony, um, as you start building the next big thing. So that's why I wanted to have this conversation and again, thank you so much, amber, for doing this. Um and uh, I'm sure we'll.
Speaker 1:Oh, and one last thing I mentioned this entire episode is not sponsored or anything like that, but you and your team at Vested were kind enough to give a bit of a benefit, a perk, to the Misfit Founders audience. So we do have a discount code. If you want to try Vested platform, if you want to put together an, if you want to do um, you know, put together an argument with your co-founder, or maybe you have a team that you want to reward with with share options. Maybe you want to do a cap table and you know visualize and submit automatically stuff to hmrc and not have to do it manually. Um, there's a fundraising as well. That that's. That's a thing now on the platform, so you're able to to automate a lot of these. You know legal proceedings, bits around um, shares and and and stock um in the platform. You get a discount code. Give it a try and you know, feel free to just go and um in the comment section and let me know what your thoughts are.
