What if 2 founders and one biz dev girl start a fund?

My business partner and I own a startup (company A) that we created, and we’re currently raising funds.

Also, we know a talented accomplished bizdev girl who wants to start a ‘fund’ to provide capital to an accelerator to nuture startups. She has access to investors who will inject capital, my partner and I will run the accelerator to vet deals and attract founders. So their will be a ‘fund’ and an ‘accelerator’ collectively known as the ‘group’.

All three of us will get salaries from the fund and we collectively would own 20-30% of the ‘group’ whereas the investors would own 70-80% of the ‘group’. So the three members collectively own part of the ‘group’ vs individual companies. The ‘group’ owns stakes in each company it ‘accelerates’.

OK… long story short…. we are bringing in Company A (that my partner and I started and own), but the bizdev girl wants a piece of Company A. Her argument is that its not worth her time to push for attracting investors to start the ‘group’, if she has no ownership of Company A.

Our view is that company A will likely be the first company to receive capital from the ‘fund’. She will be allocated her appropriate ownership in Company A through her portion ownership of the overall group and nothing more.

What do people think of this? Should she be part owner of our Company A and get founder ownership if she is trying to build a ‘group’ using our Company A as an exciting portfolio option for investors? Or should be simply continue trying to raise funds to start a group and consider Company A a nuetral company that simply could be the first one?

My view is that we all own part of ‘the group’ – but if any of the founding members of this ‘group’ bring in their own company then they should keep their founder ownership in their company and the other members of the group simply take some effective ownership through their stake in the ‘group’.

In short, can you start a ‘fund’ with people when some people are founders of a company that may come through the fund when others are not?

  • It is a question of alignment. The girl wants to be more aligned to your success, which seems reasonable, she also is diversifying her risk, in case the fund is a success for your company, but not a long term thing.

    The big question is the value of the stake in your company. Presumably as you are starting a fund, that equity is worth a significant sum. What is reasonable to effectively motivate her at the fund and provide relevant value for you?

  • Not sur limited partners would be happy with you running a startup in your own accelerator…..too many conflicts and possibilities for things to epic fail. The team is already fighting………

  • My reccomendation would highly depend upon what your company does and how it is structured.

    Without knowing more here is my gut response:

    Don’t do it! It can be very tempting to let someone else hold your hand and provide introductions to investors and investment funds. There are sufficient sources available that this is not necessary and from everyone who has let equity go “cheaply” in the early stages, every single founder I have spoken with has regretted it. If you are really struggling with fund raising, pay someone for advice and information.

  • Even if you fully disclose that you own company A you will be facing an on-going set of potential conflicts of interest.

    Decide first what business you want to be in. Company A or the Fund. You won’t be able to run both well.

  • Just start your company and put this stupid fund accelator shit on the back and become a successful entrepreneur instead of a wantrepreneur who will make excuses when it all comes crumbling down

  • This all sounds insane. You can’t make an accelerator and then choose your own company to invest in/accelerate.

    Also, I BEG YOU to stop calling women in tech “girl” it is so demeaning

  • So for all of you talking about the “girl” I assume one of your daughters under the age of 18 is involved in your business venture? Otherwise… I’d like to tell all you “boys” in tech to stop referring to women as “girls”.

    That’s about all I’m going to say because if you, the 2 non-“girl” (I’m assuming that means either you’re male children or you’re adults) can’t make sales… you shouldn’t be relying on a “girl” to do the hard work for you.

    Founder/CEO rule #1 is to make the first sale. So go make a sale before you start hiring children to do your work for you?

    Also, please just go work for a big company and don’t bring this sexist and immature perspective into the tech startup community, k? #TYVM

  • NO.

    WTF, just because 1 of you has “access to investors” (debatable without guarantee of how much $$/connections/effort involved), does not mean you know d*çk all about running an accelerator (and all the organization, marketing, connections, mentoring, support admin/legal resources involved).

    Running accelerator = fulltime job and funding your own company = massive conflict of interest. No investor/LP with a clue would agree to this and no founder with half a brain would f≈çk up their startup/life by joining. So stick to your co., and let the woman (*not girl, as I’m sure she’s over 18) find other partners to set up fund (if she actually has a clue about them) and invest separately in your company if she wants to.

  • If “girl” is so offensive, then why do women use it? e.g. groups like “Girls in Tech” / “Girl Develop It” / “Girls Who Code”, etc.)

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