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Hi all, this has been biting me a bit.
I've been invited to be a coder ( me + 2 coders and the organizer as ux ) to a startup, and was verbally promised a share of the revenue ( equal ). The organizer is not a close-friend, but merely someone who invites me because I suited the capabilities.
The idea is quite nice, not era-shifting though, and looks like there are going to be a lot to learn side-by-side, too : lega, marketing, business stuffs I don't know and never did before. However, all of these said future have no legal contracts until the formal registration of the company ( where names are formally noted, and registered to the government ), which is when revenues start pumping in.
The startup requires devotion other than my full-time day job, which I can use to do other stuffs ( meaningful and constructive ). It's going to be a year or so. I am thinking without a legal contract guaranteeing the benefits of each member, it can be dangerous to me ( and the other memebrs ), as "coders are expendable". There will be no salary.
My best case : Idea goes live and launches. Profits come in, I get my shares. I learnt how to do business. And promising future.
Best case out of bad cases : Idea goes live and launches. Died soon, I get my shares. I learnt how to do business.
Bad case : Idea dies halfway. Initial projection of time dragged too much. I learnt how to do business, albeit at a cost of time and more.
My worst case : Idea goes live. Initial projection of time dragged. But the organizer plays dishonesty and kicks me / other coders out, taking the whole share.
My questions :
1. Without the legal contract, how bad will things be if things blow up?
2. From past experiences of you, do people really respect verbal agreements?
3. Could there be any legal issues on me?
4. What could I do without a written agreement witnessed by a lawyer?
5. What could I do without an informal written agreement ( no lawyers involved )?
I understand there is a risk to take, and I also understand that "getting excited by the future" could be the height of a folly, but then I might be wrong. I also understand that despite the risk, this failing in most cases could teach me a good deal of lesson, too.
I appreciate any smart advice from you all experienced people.
Thank you very much.
[edited linebreaks of questions.]
I frequent here reading. I really value the opinions here, hence here I have questions that I felt best to post here.
1. Do I need to get some breadth about bookkeeping, accounting things myself? If yes, where can I get such resources if I decide to self-learn?
2. Do I need to get some breadth laws regarding startups? If yes, where can I get such resources if I decide to self-learn?
3. Do you do the bookkeeping (money) records yourself or hire somebody to do it?
I have completely no idea and am just reading business books. I am trying to get more sense and prepare myself some sort. Thanks a lot all!
Update : I'm China based.