I have a quality problem as follows:

Following discussion of an idea I had for a social network (with a health emphasis) a friend of mine said he would like to provide the seed capital for the initial site build out and marketing. He is very successful in several businesses but not in this sector. I also like him a lot and believe he would be a great partner for his ability to attract capital for series A.

How to value the company for this investment? I believe the amount offered would adequately construct the site and allow us to hire an assistant to help manage the day-to-day. The strategic plan for the site projects revenue within the first year on a subscription basis.

I hope this is a good place to post this query. Thanks in advance for your help and guidance.

Jason

Have a question regarding the equity partnership, though: you said that the ideal way to split something up is 50/50. What happens if the investments into the company are not 50/50?

For example, in my scenario, a partner of mine has invested x, and I have invested 2x. We have divided it up according to the investment, and given some additional amount for the management effort. Are these common? Do they work? Long term sourness?

“It can definitely be one person’s vision and one person’s drive, and so forth, but that person had better be really, really driven and really confident, because every startup goes through tough times, and you won’t have a shoulder to cry on, not really. You won’t have someone to pull you up.”

Driven, yes, confident, no. Tough times, yes, but “confidence” leads to “blindly following a path even when it’s clear you should change.”

In fact I’m probably not confident enough! I’m constantly second-guessing myself. It’s a mixture of perfectionism and introspection which doesn’t allow me to believe I ever have the “right” answer, but also gives me the obsession and drive to march on, and to not be satisfied with mediocrity.

Still, I admit it’s easier overall with two founders, especially in the early days when you have a 2x acceleration on how much can be done in a week.

Thanks again for the deep and specific content.