Archive for the ‘startups’ Category

Four days of Naach-Gyaan: Morpheus’s 1st startup gurukul

Tuesday, June 8th, 2010

In the summer of 2007, the moment Sameer & Nandini’s last startup Madhouse got acquired, another one started brewing in their heads. This time the plan was bigger and the idea was beyond running a startup, but kick-starting several of them. One year later after the acquisition, Morpheus was born with Instablogs as the first company in the portfolio, with other kick-ass companies being added to the “gang” in the subsequent 18 months.

The Morpheus

Aptly, Morpheus was named after the greek god of dreams; to a more real (fictional to some) world captain of Nebuchadnezzar who brings the dreams back to the residents of the last human city.

Then in the 2009 summer, I joined. This summer we are adding another 7-8 startups (names to be announced on 10th June) which brings further variety in our portfolio from automotive, eco-textile, health-care to touch computing.

This weekend from 10th – 13th we are doing our 1st ever startup gurukul on the outskirts of Bangalore, where we are bringing the founders of our portfolio companies under one roof and kicking it off with “Apuroop” — a demo day. At Apuroop, Morpheus companies will be doing 5 minutes show & tell to investors & media.

We are also delighted to partner with Sequoia Capital who are supporting us in our initiative and sponsoring the gurukul.

We have come a long way since our nimble start where we were doing just mentorship to now where we are also investing a small amount of INR 5 Lakhs in each of the startups. There are more exciting things coming out of our bag, controlling my excitement, we would unravel them as time passes.

Thanks for participating with us!

No remorse compensation: Bring friends to work with you, but don’t part as enemies

Friday, November 27th, 2009

Two people get together and start developing a product. You are one of the founders. Few more common friends join. Everybody starts working towards a goal. Six months out, the product is still taking shape; Few people who contributed move-on to other things. This is a usual startup story.

In the above scenario a formal agreement or a compensation is the last thing in everybody’s mind (or like-minded people) when people start working together.FriendsMoreover, working together for some time helps people gauge the ‘mutual fit’ before signing each other up for 4-5 years. It is quite possible that after sometime a few members of the team decide to mutually part way and move-on. The question pops — what/how much would be the compensation if things do not move forward into a formal agreement? How much should be the compensation for the person who has worked his ass off but now thinks that he needs to move on?

People leave because of several reasons; personal, financial, etc. 100% possible that they come back a year later when they have sorted things out.

You as a founder of the company need to worry about people joining your startup — at the same time you also need to think through of compensating people who came trusting you for shorter stints. You have to decide this upfront when the person starts working using a simple math.

No Remorse Compensation is a way of rewarding people (esp. friends) who plan to contribute in building your startup but may move on later to do something else. To keep things simple you agree on a compensation before writing things on stone say 6 months later. Here’s a simple math:

1. 2 people team, started, now looking for a seasoned techie to manage the codebase and developers while the two of you do sales/marketing/product as well.

2. The 2 founders decide that the techie would get 10% of the equity (and some salary, if any, but for now, none) — however, the techie says “lets work together before making a decision.” You don’t want to leave things hanging without making any decision on that. Assume that the techie would work 4 years (48 months). So the techie would “earn” 10% / 48 = 0.2% equity every month.

3. Most probably you are not paying any salary to him — so add 25% – 50% more equity. So the number becomes 0.3%. Assuming you have 1,000,000 shares outstanding, that becomes 3,000 shares every month.

4. The techie earns 3,000 per month until you come with a formal agreement which maybe in line with the 10% equity or maybe less. Make sure to arrive at a decision point in 3-6 months and convert this into a formal agreement.

5. If ok, you can sign a simple consulting agreement with the numbers mentioned.

The above idea is simple — You bring friends to work with you but don’t wanna part with them as enemies, if it did not work out. You may meet him again at beer in the evening!