Thanks to the brilliant ideas from Mel, to compile our discussion into an useful post on MSC’s Preseed Grant.
Pin wrote:
1. Have at least THREE directors, not two. Can you imagine a vote with onlytwo voters? It is a die-lock but it is so common in a partnership especiallywhen requirement ask you for just two directors minimum for a privatelimited company in Malaysia.
2. No equal shares in a partnership. A lot of startups with two founder choose to remain in 50/50 share structure from the RM2-company, hmm. Time to chance!
3. Share allocation, how and why? It is too easy to give by mouth than words. Put it to agreement, both side should have an understanding of what to receive and what to give. If one side not delivering, the another side should have a reverse plan, discussed and written down.
4. Often, one party was challenged because the said agreement was never done. In judge terms, it is fine- as long as you have the proof of conduct to show your involvement. Email backup and other important archieve can be of useful sometimes.
5. Money, money, money. Define a process for how to deal with money in your company. For example, what is the procedure of making a payment by check?
Many startup mix up personal & business money together, which is definitely not a good practise. You will take even longer time to sort this out when your company grows later.
Mel wrote: dont hv a suitable partner in mind. I thought of working solo all the while. Don’t mind to hv consultancy partner, but a bizness partner??
Find it hard to entertain that thought as of yet.
Whats yr experience and advise on this area? Can i just put a pseudo name?? Like my mom, hahah.
At pre-seed stage, most companies just can’t afford(or don’t need) more than one core team member but I guess there’s an exception since you’re applying for a grant. IMHO, if you know how to realize the idea (where to outsource etc), then it’s better if you do it on your own (or with one partner) to cut cost and headaches. ;p
Any thoughts? Pin is right, the 99/1 is even better if you’re just using her name.
George wrote: Just share a bit. Private Limited company need at least 2 partners to be formed. However, you can get a “Sleeping Partner” thus you can have the full ownership of your company. Alternatively, a partner can be a company as well.
However, in long term perspective, one man show is really ain’t going anywhere. Find a real partner that can help in your work else you may ended up working 7 days a week.
Mukmin wrote:
For what it’s worth, Mike Tee advised me to go the 90/10 route. Find someone who has done a similar project in the past for CV purposes, use his name. His pay is the $1500/mo allowance for his work.
And after completion of the project, you can buy out his shares and use your mother’s name. It’s a requirement by the ROC for a SDN BHD to have at least 2 directors.
Keng Yew Tham wrote:
% partnership is very important identify the key driver in your organization most of the time, there will be only 1. cases like mike and devan are rare. if its you, then you should be holding majority share. please dont go 50/50 or 40/30/30 or worse 33/33/33 reason being in socialwalks case we applied for venture capital injection and we were initially in the stupid 33/33/33 group and once the VC came in, they would be the single biggest shareholder its damn dumb. even VCs will advise against it. and u gotta have a really cool core team who will stick with your decision to revise shareholding. this gave me a damn big headache for the longest time hope u dont have to go thru the same.
Avijit Paul wrote:
Hi Melinda, If you ask me, I would say – You definitely need a partner. And no matter how much you think you can do it all – I would say you cant. It is a seemingly good solution to get a “sleeping” partner, but since I believe you are doing something on technology, if you dont have good partners it is just a matter of time before you snap.
Lets say you are one person. so you have to do
1. Accounting – all the costing things
2. Reporting – Mdec and any other reporting
3. Development- You might outsource but you have to monitor
4. Sales – You got to go to sales meeting
5. Marketing – if people dont know you then you cant sell anything.
6. R& D / Innovation – You got to improve your product. Else when you are successful someone will come and take you out.
7. Networking: You need to meet people too. You will be surprised how often you get deals done because someone you knew, knew the person in charge and they thought are cool.
I like this quote a lot – “it takes 10 years to be a overnight success”. Without a partner I think it might just take 30.
Hi Mukmin, I discouraged Melinda from submitting her mom as a secondary member because MDeC will require CVs and stuff. Not sure if they do any verifications, but best to err on the safe side. RM150k bro! But since MDeC doesn’t put a rule on the shareholding, technically you can have a friend as a partner with a 90-10 share, and then buy him out after the contract ends.