Questions for You
What are the uncertainties that might affect my commitment to this startup? My cofounders’ commitment to it?
If we haven’t experienced the most difficult parts of the founding journey yet, how can we tell if any of us will be able to persist through them, or will one of us drop out of the startup at that point? How can we proactively plan for that challenge?
What are my financial expectations? Am I being realistic with myself? Am I being honest with my team about my expectations?
What non-financial rewards am I willing to give up to gain financially, and what non-financial rewards are more important to me?
Questions for Your Team
What commitment is each of us making? How certain are we of these commitments? What contingency plans should we have in place if someone falters in their commitments?
Who should be paid what, and why? Are we being realistic? Are we being open about our expectations?
What uncertainties exist that could affect the relevance of our equity split in the future? Which uncertainties are we underestimating or ignoring? How should we deal with them if a worst-case scenario comes true?
How can we craft an agreement that acknowledges the uncertainties and moving parts?
Tools and Exercises
What are you certain about?
What are the uncertainties?
Evaluate: do you expect to change your business model? Pivot? Can everyone scale? Are there any personal uncertainties? Other intervening variables?
Wasserman, Noam, and LP Maurice. "Savage Beast (A)". Harvard Business School Case 809-069, November 2008. (Revised November 2012).
Wasserman, Noam. "Smartix: Swinging for the Fences". Harvard Business School Case 808-116, January 2008. (Revised December 2012).