Thanks to The Social Network, the 100-percent accurate movie about the early days of Facebook (pictured), we all know things can turn out badly when friends work together on a startup. Co-founders can get screwed.
On the other hand, it probably doesn’t make sense to hire a lawyer when you don’t even have a working prototype. That’s where a site called Foundrs.com comes in. It allows entrepreneurs to “virtually” incorporate, distributing the ownership of the company in a legally binding way. The site can also adjust equity later on, for example if you add more people to the founding team. Then, if your product actually starts to take off, you can take the documents to a lawyer and incorporate for real.
Foundrs.com is actually the latest version of a Mountain View, Calif. company called FairSoftware. The concepts are similar, but FairSoftware didn’t emphasize the idea of finding co-founders — it was more about creating an inexpensive-but-fair way to hire people to help with your startup idea.
The recent name change comes with some new features. For one thing, chief executive Alain Raynaud said FairSoftware’s old interface of 20 different menus has been distilled into two buttons. And the business model has changed. FairSoftware previously asked for 3 percent of future equity, but since, as Raynaud put it, “everyone tends to over-estimate the value of their idea,” users didn’t want to give up any ownership. So the company is scrapping the equity requirement and just asking for $9.99 per month.
What are people doing with the service? Raynaud wrote:
Ruby developers create web apps. Students build gaming forums. Or Music apps. It’s all over the place. Some come with a group of friends as co-founders. Many use us to try out a potential founder they just met, because they like the comfort of having all the dirty details of a co-founder agreement done for them with just some cute buttons to push.
Raynaud plans to add “founder matching” features in the future so that Foundrs.com can help you find founders before you sign up to work together.