Savage Beast
The team has complementary skills. John was the business guy, Tim the ‘big idea’ guy and had knowledge of business and music and Will was the engineer. I like the fact most of them had knowledge of two of the three areas that the business needed. The equity split should have been more on the side of Tim since this could affect his long-term dedication to the project. This was his idea and the two other founders were helping him build it. If the other founders left, Tim would have to continue and a larger equity might provide more incentive.
In that sense, I do not think that John leaving the company was a bad move. John had his personal family reasons for doing this, he was seeing the bad signs and made this decision. But John’s role was to help Tim understand the business part and build a company. This had been achieved. John had done his part so far. However, Tim’s role was different. He was the soul of this company and his dedication (which should have reflected into the equity) had to keep him running for the survival of the company and the viability of his idea. Even if he had to sell out equity, he had to do it. Tim had to be the last one abandoning the ship. And this strategy, even if it meant that the ship would sink, wold teach him the limits and the tactics of crisis situations. This be a useful experience for his next venture.
There are several mistakes that led to the crisis. First, taking money from relatives and friends and hiring people they knew. That made the founders more sentimental and forced them to put their own money out in the line to keep the company afloat. This fact led to a series of wrong decisions such as deferring salaries and having to pay them back which in turn made additional funding more difficult to obtain. Secondly, the sales effort was not professional and therefore I think it was hard for them to rump up sales.
Lastly, Tim is a guy with excellent team leading skills, a talent