Less than three months ago, Banqer was just an idea. Then I got together with a group of strangers and made it more than that. And last night we decided we’re making it official - we’re incorporating as a company.
We don’t have any paying users—heck, we haven’t even got a finished product yet—so why so serious so soon?
We didn’t make this decision lightly—far from it—and there are a few reasons that meant that now was the right time for us.
Eliminating future risk is one reason. At the moment we’re all contributing to Banqer, our joint project, and we’re relying on one another to act in good faith.
That’s kind of risky. Who owns Banqer if Banqer is built on good faith? Does Marc own the designs? Ben and I the code? Do David and I own the partnerships that have started to form with other organisations? And could Micah run away with our student resources and educational content?
Part of our incorporation will answer some of these questions. Intellectual Property will be transferred to the company, and going forward anything we do for Banqer will belong to Banqer Limited, the entity. This makes things really clear and transparent.
Another reason to incorporate, and arguably the most important , is to formally structure ownership. How much Banqer do we each own? This will be a hard one. Deciding this split is never easy.
Right now we’re all contributing evenly, all putting in similar hours and similar effort, but how do I know that right after we split things five ways someone won’t decide it’s a nice time to take a trip to Fiji?
As it turns out, a few people have been in this situation before. There are various ways of structuring ownership that account for such risk and incentivises continued effort.
Vesting is one form of this. Say we split things 20% a piece, what we can do is ‘vest’ that over a certain timeframe. So we all get 20% but we only get it a 1% a month for 20 months or whatever we decide. And if we don’t do our work one month, we don’t get our 1% - seems fair right?
There’s also what’s called a cliff, typically added to vesting. The idea of a cliff is that you’re promised your 20% of Banqer vesting over 20 months at 1% a month, but first there’s a 1 year cliff - where nobody starts “earning” their 1% for a whole year.
And those are just two options. We can really tailor something that works for us ensuring the ownership structure fairly represents the effort and time being put in.
So with a little (or a lot of) advice--legal and otherwise—we will soon be registered with the Companies Office. I’d be lying if I said this wasn’t just a little scary. This is really putting Banqer out there. You don’t just accidentally start a company—it’s a very purposeful process.
So I guess what scares me is that this is the declaration that I want this to be a success. And that declaration is scary because I could fail, because Banqer, as a project or a company could fail. Then I would have not just a failed project, but a failed company on my hands.
But that is no reason to not try, to not incorporate. We could be stagnant and disappear into the Startup Weekend graveyard, but I’d rather try. I’d rather declare that I want Banqer to be a success. I want it to be in thousands of schools around New Zealand and eventually hundreds of thousands globally.
Keep an eye out for us on the register - Banqer Limited.
