These are notes from an actual conversation with a founder...
best set of questions we've seen...
and fwiw, we didn't close on this deal.
1. How do you make money?
Our equity vests when the company achieves $15k MRR. We then explore exit options, ideally at the $10mil mark.
2. When this work is taken up is there anything else we will have to pay after the equity?
Once our shares fully vest, we become advisors just like any other investor. We will NOT pay for any 3rd party services such as hosting fees, AWS, email, etc. We will also NOT recommend any paid services to you that will not be covered by revenue. For example, if we are making $1k MRR, and we think getting seamless.ai or mail chimp will increase revenue, then we will recommend you use those services. The goal is for NO ONE to spend a dime of their own money to service the company.
3. Will you be more into US market or overall?
We will go where the revenue is.
4. Will this also include product development?
We will do whatever is necessary to achieve $15k MRR. If this means building software, then we build software. If it means cold calling, then we cold call.
5. Will this be more with market reach or other things will be involved, I would like to know more as to what all will be taken up by your team?
Whatever is necessary to achieve the deliverable: 15k MRR. This could be anything. You’ll need to adjust your mindset to thinking like a business person rather than a consumer of business services. How high is the sky? Our incentive is to achieve $15k MRR. We don’t get equity unless we achieve that deliverable. Our equity is also not worth anything if the services delivered are not valuable to the company. Therefore, why would we do anything other than deliver services towards achieving that goal? Well, we wouldn’t because it would be a waste of time.
6. Will we continue to do things the way we are or will the entire plan be chalked by you and taken in that way?
If you’re not making any money right now, then something needs to change.
7. What will be the amount of equity you would want us to dilute for this?
That depends on how far along you are. Fill out the Trello board and we will explore your progress. Our first 10% equity vests when the company is earning $1 MRR. Our next +15% vests when we achieve $5k MRR. Our next +25% vests when we achieve $15k MRR. It totals 50% for pre-revenue companies. But we are willing to negotiate if you’ve already got clients, a functioning platform, etc. BUT just an idea or business plan - especially one we need to completely redo - we go 50/50, as we should because we are essentially confounding the company with you.
8. Will the company be registered in the US and in that case you would take up the entire process for the same?
It’s best to be registered in the US. If you have already registered a corporation elsewhere, we can discuss some arrangements.
9. We would have presence in what parts of World thereafter?