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All for one and one for all when no money in startup, things change when funding happens
This situation has arisen many times in many startups and led to closure of startups or having led to strain relationships. The bottom line in the statement is how people react when greed takes over the focus of growing or surviving.
Its natural tendency of human being who change when greed comes in to picture nothing wrong in it, but learning from this helps in understanding the startup that you are building and also to have more decision making and control over the startup.
Four friends who were classmates from 1ststd grow up in same place and same college and graduate, and all of them have been thick friends for long. Once out of graduation wanting to do some thing of own comes out a idea on which they startup.
All four friends debate discuss and arrive at conclusion to finalize on one idea and get started against all the wishes of parents who wanted them to take up jobs and have settled life.
All four struggle and pump in funds from their savings and get started on and all of them divide each area of work and also equally divide the equities, this is most commonly done in startups. So all of them head a specific part of work and equal part of equity in company.
What started to prove point grows and grows big and comes the time to raise funds, so here the small point comes into picture I am responsible for what today this company has become, where in I becomes important than Team.
The funding happens and all friends are richer but here is where things go wrong, the question of diluting equity comes in to accommodate the investor where in the same friends who started all for one start falling out on dilution of equity.
The bottom line greed and the worst condition is sometimes investor play on this in getting upper hand in equity from the founders.
The only way you have this sorted out is having clarity on role and equity being diluted as per the work and responsibility and not the number count. In any corporate company salary for same two experience people will not be same so if this rule is taken in startups before starting the end result will not be in separation and killing startups and relationships which were built over long period.
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