Ask HN: How to structure / split up new venture between co-founders
I am technical and have found a non-technical partner who owns a legacy SaaS business (let's say $300k ARR).
In short, we want to rebuild the legacy product and relaunch as a new product, while gradually cutting over existing clients and gaining new clients. The end goal would be to deprecate the legacy product and close it down.
We both want to split this new venture 50-50, however it is difficult to separate the legacy from the new business. And the legacy product has to continue to operate while the new one is developed.
Does anyone have any advice or experience on how structuring a split might look? If we start a new company, how hard is it to share assets/IP/clients from the legacy company? Should we create a subsidiary of the legacy company? Should we just keep it all in the legacy company and figure out how to grant equity to that existing company?
Any help is appreciated!
I think it depends on a lot of factors, including the timeline and efforts for rewrite, if you are going to get paid, your role and new version of product's role in new client on-boarding (expansion of client base), ... .
I think you can try to come up with some projection for the near future and then value the venture based on that and then try to correlate existing or new efforts with this valuation.
Leave your email and I can have a call with both of you to create a framework as I have done before for similar situations.
Thanks for the advice. Here's my email if you're still willing to chat ccanning10@gmail.com
Reached out waiting for a response if still interested in discussing.
Keep the legacy company. Split 50-50. Add a contract clause that the first 300k in anual revenue will go to your co-founder for X years.