Before you start, create a plan to stop
My #1 rule for ventures, especially with friends, is to create an “ejection seat plan” at the beginning. The ejection seat is designed to save friendships and prevent teams from holding on to ideas too long.
Write down a list of milestones that must be achieved in 1, 2, 3, and then every 3 months up to 48 months. Agree that either partner can choose to eject without blame whenever the milestones aren’t met. Agree how much equity will be retained in the event of ejection. Follow the plan.
I credit five inspirations for the ejection seat plan. (1) Tim Ferris’ “dreamline” concept from 4HWW, (2) news stories about “golden parachutes”, (3) my friends who learned this with me the hard way because we didn’t do it, (4) the Stripe Atlas guide to founders equity, (5) my friend who helped me validate that it can work.