• February 2019
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What Is a Good Way to Test out a Technical Cofounder in Legal Terms?

A reliable business attorney is going to tell you that the best advice is based on both legal and business considerations. This is often the approach we take at LawTrades— a marketplace for legal services.

Legal Considerations: Your choice is to decide whether your co-founder should be an owner or an employee with incentives. Incentives can include stock option or RSUs. You can learn more about the differences between options and RSUs here.

From your question, it sounds like you’re trying to find a way to onboard this person who you consider valuable to the success of your business.

There are certainly legal mechanisms available that you can incorporate into an operating agreement. These would include such things at maintaining minimum percentage thresholds that would allow you to control changes to the corporate structure and the board. In addition, you can base equity on a dynamic-split model, rather than fixed equity. You can learn more about how that works here.

Since your question raises many questions that really require legal guidance, you shouldn’t try to resolve this without assistance from a knowledgeable attorney.

Business Considerations: I’ve found that the most successful co-founder relationships are built on complementary skills and personalities, and mutual respect. For instance, if one person is more tech-oriented and the other more business-inclined, then that arrangement would tend to be more complementary than if both are competing in the same space.

Have more questions? Feel free to visit LawTrades

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