The proof of the pudding is in the eating. Either make a better counter offer using your rep as your backing or go build something. Saying 'nay' is easy, improving on the concept is a bit harder but can easily be done if you're so inclined. You are essentially saying that people here can't make up their own minds if they want to take a chance on something or not.
If the OP is full of it then I'm pretty sure he/she will be hung out to dry and someone may be out a month and will have gained $5K. Whether that was an acceptable risk to take is up to them.
Unlike much of Western Europe, the US has pay to play model for elite youth sports. It is largely a side effect of the role colleges play in amateur athletics. There is no La Masia. There are no schoolboy contracts.
I referee youth soccer. My son plays. I see the way the business works.
Dreams of college scholarships fill the trough at which professional youth coaches feed. All premised on the misconception that women's soccer is like college football. But women's soccer is only allowed 12 scholarships - football has 88.
The general conception of what it means to own stock in any business tends to be closer to the Microsoft secretary and the Google chef than to an approximation of $zero. My biggest criticism of the offer is the anonymity of the investor serving as precedent for similar offers to the HN community. My concern is that such offers feed off people's dreams.
The deal is structured in a way almost guaranteed to require additional investment should the project gain traction. There's no runway by design and once the technical founder's position is diluted, he can be swiftly booted to the curb.
If hmexx is a moral paragon, I cannot offer a better deal. If he isn't, I can offer no deal at all. And that may be a better one.
So, we're all youths and we need a daddy to look out for us?
Hmexx is putting his money on the line.
You counter with paranoia and paternalism.
If hmexx wouldn't be $55000 short on what two months are worth to me I'd happily take him up on his offer and I don't think I'd need you to look out for me on the contractual side of things.
If there is just one person here whose price tag is a bit more modest and who is sharp enough to come back here to ask for some guidance during the negotiation phase or the review of a contract then that person has all of HN to back them and a ready pool of counter offers in case the OP is full of it.
No deal may be a better one. But those that make it into the big leagues would agree that being stuck in youth soccer is not the end of the line for everybody.
If hmexx is looking for a cofounder the numbers make sense. If hmexx is creating an incubator they don't because there is no meat on the bone at 50% equity. The founder has no way of getting more runway without becoming a minority shareholder - there aren't any good choices once the $5000 is gone.
Maybe, hmexx has structured his offer without considering the ramifications of 50% stake as an incubator. I'm somewhat inclined to give the benefit of the doubt. No level of ethical intensions makes 50% equity make sense either for entering or accepting a project into an incubator.
50% equity is what investors demand to keep an enterprise from dying. Flowers are appropriate for a first date.
You're missing out on the 3rd option: hmexx could gamble 100K, do 12 of these and finally pick the one winner to spend all the rest of his time on and drop the rest.
And of course the founder has a way of getting more runway without becoming a minority shareholder: put more money in.
Yes, and it's the third option that raises the question, does hmexx retain 50% ownership of the other 11 projects? If so, those founders are married to a disinterested partner with veto power.
If hmexx can conjure traction with $3k and little further effort, then entry into his incubator could make sense, even for a person with the resources to develop the project on their own, at least from the standpoint of logical possibility.
Is it good for hmexx's investment to structure a deal likely to produce problems for the counterparty after two months? I guess that depends on whether one believes that fast failures should be total and lead to abandonment or partial leading to adjustment.
A safe strategy for the counterparty to hmexx's incubator option is to produce a minimum MVP and go passive, letting hmexx do all the heavy lifting if he wants to move the project forward.
What I see is that a 50-50 incubator split doesn't align with the interests of either party. It disincentivizes the developer from seeking to raise outside capital, and should the developer choose to pursue outside capital, the developer must use some of his limited runway to do so.
It seems to me that the sorts of developers for whom hmexx's offer is most appealing are those less likely to raise additional capital on their own - i.e. if they were able to raise capital on their own, they might not need hmexx (a talent which conjures traction for $3000, aside).
If hmexx's role includes providing the additional capital investment after runway, then the deal is actually structured to give him majority control. If hmexx's role includes raising capital from third parties, then he is going wind up a minority shareholder anyway, so why not maximize the incentive for the active developer to develop?
If my idea (and development) turns into a multi-million dollar proposition and I get booted to the curb, I'll give you my phone number for $8000 so you can offer to invest in my next venture. But I don't guarantee I'll return your call, because my phone will be ringing off the hook.
If I fail, I'll get another job after a couple months and do it again.
If the OP is full of it then I'm pretty sure he/she will be hung out to dry and someone may be out a month and will have gained $5K. Whether that was an acceptable risk to take is up to them.