Sleaze-ball's wear suit too, they usually talk about how much money they can raise for their project, only if you will build it for little equity and zero compensation.
I had been working on a technology a couple of years back in Silicon valley. It was hot stuff and it was right in tune with some very relevant changes in web advertising. I wrote a provisional patent and started seeking partners. I spoke with a few guys in Palo Alto and later tried to get a startup going with them. My role was to build the technology and their job was to introduce me to investors and help raise capital. They claimed to be big-wigs connected with all sorts of investors.
Well, in the end they they failed to deliver the funding , so I went out to seek my own. It was not until a couple months later down the road while sitting down with a high powered IP technology attorney in silicon valley, i got a shock of my life. This attorney found out about these other “short-lived” partners of mine, and this is verbatim what i heard come out of his mouth.
“You know Dylan in this town there people out there who try to take advantage of inventors like your self, guys like you who really innovate. They do this because they have a serious lack of ability and or creativity, they are what we in the technology industry call parasites. And it looks like you have a couple of them trying to hang on your coat tails here. I am sorry, but you need to figure a way to shake them before you can go forward. They are trying to claim ownership on your patents here. I am really sorry.”
I was astounded literally knocked on the floor! I mean, to learn that people I had trusted and been working with, but who failed to get my ideas the traction they needed, would actually claim my work as their own. It was simply unheard of in my world. This was the first time that I learned about these “wanna-be free loader” dot.com entrepreneurs. They are all over the place. If your a skilled technologist and entrepreneur, just post your resume on Craigslist and you will likely get an email or call from a few of them.
These kinds of low-lifes look for and prey upon the people who have all the skills that they lack. Their first goal is to get someone else to build their get rich quick schemes as quickly as possible. Then screw them as fast as possible.
I have put together some red flags that should warn you about these wannabe dot.com entrepreneurs. Just some sound advice from a serial entrepreneur who has been around the block.
- They speak with a lot of Buzz Words….
First off these kinds of individuals are trying to sound smart with out really saying anything at all. Their lack of experience gives them away very quickly, and when pressed for the significance of their rhetoric you will quickly find out that they are out of their league. - They have ZERO actual experience in a DOT.com…
Easy to validate, ask them how many companies they have founded, launched and sold recently or even in the last several years. Check their credentials if they say so. Ask for the name of the buyer, and call or email them. Verify their entrepreneur history. - They beat you up over your compensation or equity, or flat out offer you 1%-3% of their company for your hard work…
This is often the biggest tell tale sign of a con-artist, these wannabe’s give you lots of lip service with very little actual substance. Their position is that an idea and a name are so valuable that they can get any developer to do it for peanuts because that’s how everyone else who is a dot.com success got their. Just look around at the really successful internet sites and you will realize that they are completely wrong. 99% of all successful start-ups are founded and run by real technologists, not fake-o’s.
When it comes to compensation you should be compensated at full value of your work in equity if they don’t have cash to pay for it. This is what sets your equity in the company. So agreeing upon the overall value of your work if they were to hire you or your company at retail market price is critical. If you discount your work for any reason, be sure that the discounted value is written into your contract against the other founders contribution. Its a simple formula. If its going to take 3 months to develop a Java based website with mobile API fro example, the market rate may be at around $80-$100 per hour. This means if your spending 60+ hours a week for three months your equity contribution is estimated at around $6000 per week. Times the 12 weeks to build the software, you looking at $72,000 in contribution. Thats real money from your pocket. Be sure to have your paper work acknowledge this, this usually will get the dot.com wannabe to run quickly in the opposite direction. These kinds of people don’t see what you do for a living as having any value. So dont be surprised if they give you hell over such a equity investment. - Failure to comprehend the importance of sound engineering…
The fact that it takes time to build innovative products is also lost on these kinds of individuals. They lack the basic knowledge of software design and see it as something which can be bought and rapidly deployed, citing out of the box CMS tools or PHP based website clone scripts as their model for building a multi-million member website. - They will try to micro manage you…
I mean come on. your a highly qualified engineer and innovator, why the hell do you need to have some nit-witt breathing over your shoulder while you build anything. If you were incapable of doing the job why the heck did they sign up to partner with you in the first place? This simply comes down to a power and control thing. They want you to be on the defense so you can not get perspective on their ripp-off / con-artist angles.
In the end there are many more ways to detect wanna-be con-artist dot.com entrepreneurs than listed hear. This is a few from my experience. This should help you a bit when identifying these sleeze-balls that come at you. Good luck. Ciao.
