Empire Avenue

Tuesday, June 21, 2011

Distribution of equity among founders at start-up

A friend called me about this issue.

I don't have the solution for every given situation but I thought I would share my thoughts with you.

Feel free to comment or improve on my points!

I recommend starting with an equal share for each Founder, not each employee, I stress.

If you can't tell the difference - you are an employee!

Say you have two founders....

Your shareholder agreement should allow for those shares to be bought back by the company at a nominal sum in circumstances where the 50:50 split is no longer fair.

This would be by consensus or failing that with arbitration provided by a trusted third party - chairperson, lawyer etc.

The shares should become whole on three dates

1/3 whole on first anniversary, 1/3 on the following two anniversaries.

After a year you should know if the 50:50 is fair, but if not - you have two further board meetings to set things right.

If you are still not sure about the correct split after 3 years....it does not matter!!

If you don't raise funds, you can give a 3d party a casting vote - a chairperson or a professional advisor like your legal advisor.

This deals with the unlikely event of a complete empasse on key decisions.

If you do raise funds, a 50:50 split will no longer be an issue. You will have a third voting block and hopefully they will be valuable and active in helping you make the right decisions.

The only reason for moving from a 50:50 is if one person is demonstrably creating more shareholder value than the other.

Even this extreme case can dealt with this elsewhere:

Annual bonus
Share Options

That's my tuppence worth.

Thursday, June 2, 2011

Mladic and The Balkans - a reading list

I have put together a reading list that allows you to get to grips with the major issues around "The Balkan question"

These books tell of horrendous evil and paint loss on a scale that most of us can hardly get our heads around.

When you meet people in Belgrade, Tirana, Sarajevo or Dubrovnik, you find that every family has been visited by loss.

The "Bridge on the Drina" novel gives you a sense that this loss goes back generations and has as many layers as a Baklava cake.

So let's start at the start.....

The split of the Roman empire - Rome vs Constantinople - created long term division in the Balkans.

Primarily the division is Croats/ Catholics from their brother Southern Slavs - the Serbs/Orthodox.


The Bosnian Christian Church had a history of heresy and were harassed by both Catholics and Orthodox churches.

That made them open to conversion. Large numbers over centuries converted to Islam, brought to Bosnia by the Ottomans.


Mirkovic is a family name in all three traditions - all Slavs - all impossible to tell apart.

We know from our own Irish history how corrosive the enemy within concept can be.

That is a starting point to understanding the millennium of Balkan fear and loathing, a millennium of butchery and treachery - with all sides responsible.

A history where there is little by way of a reckoning and even less in terms of a shared history.

There has been no Truth and Reconciliation Commission like South Africa's.

Albanians - who make up most of the population in Kosovo, Albania and a good portion of Macedonia add more spice to this cauldron. The majority are notionally Muslim.

They have been persecuted by the Serbs throughout history.

There have also been massacres in reverse. Ethnic cleansing of Serbs over centuries in Kosovo explains why Kosovo, a most sacred place for Serbs has so few Serbs living there today.

This was the site of the Battle of Kosovo field. Serb and Albanian Princes fought and were defeated by the Ottoman Sultan - but at such a cost that the Ottoman advance into Europe was stalled for a generation.

It was enough time to prepare Europe for what became the successful defense of Vienna when the Turks next attacked.

Serbs believe that this battle saved Europe from becoming a Muslim backwater of the Ottoman Empire.

The fact that this totem of Serb nationalism - the battle ground, historic churches and monasteries are no longer part of Serbia is a raw wound to almost all Serbs - whether ultra-nationalist or liberal.

My work has allowed me spend time with people from all traditions in the Balkans.

I find Balkan people from all communities open, honest and great fun.

They have a lot in common with the Irish - and you find that the Irish percolate into all aspects of Balkan life.

We have a similar world view and very similar core values.

One thing you notice talking to people from the region are the huge gaps in their knowledge of Balkan history.

Into these gaps flow many myths that do not stand up to scrutiny.

Tito, (Joseph Broz) as leader of communist Yugoslavia, kept the lid on all the regions simmering hatreds.


When he passed on - two men fanned hate and hyper-nationalism - Milosovic and Tudjman.


Media operated as unquestioning megaphones for their lies and hatred.

All the fears and all the resentments carried in so many Balkan breasts were brought to the surface.

Bosnia fractured, a quasi-state was created - Republic Serbski - led by Radavan Karadzic with its military leader Radko Mladic.


The civil war that ensued killed over 100,000 people. The fighting was intense with military losses on all sides. The civilian casualties make up over 40% of all deaths. Of these a stark 83% were Bosniaks, Slav Muslim citizens.

8,000 Bosniak boys and men were killed in the Massacre at Srebrenica.


The war in Kosovo that followed unleashed hell on millions and set bitter fault lines in place for future wars.


What happened in the Balkans in the 1990's is red raw.

It is unbelievable that it happened in our lifetime. It is unbelievable that it happened only a couple of hours away by plane.

It is critical that this time the facts becomes recognised as a common history shared and accepted by all.

What happened in the 1990's is history repeating itself.

SS officers wrote of their revulsion at the horrors of the concentration camps in the Croatian Fascist state during WW2.

In that war, total civilian casualties in Yugoslavia make up 85% of deaths in some estimates. The detail of how these citizens died is truly horrific.


These horrors are repeated regularly over centuries of Balkan history.

With Mladic facing trial for his crimes - is this all coming to an end?

No is the short answer....

Not unless Europe takes a long term leadership role in the Balkan future is the longer answer.

Lincoln with the Civil War created a new manifest destiny for his America. It was to move the United States from a loose federation to unity of purpose.

Indirectly that civil war and his vision changed the scale and nature of the global economy and global politics.

With so many challenges in Europe today, we need a vision as profound as Lincoln's; a sense of purpose that all Europeans can buy into; a vision that sets nationalism in perspective; a vision that precludes anything like the Balkan wars from staining our continent again.

The alternative, a return to 20th century nationalism seems hardly credible.

The Balkans future is dependent to a huge degree on how the EU develops.

If you want to find out more about the Balkans - here are some starting points.....

@timjudah1 - on twitter


This guy is well worth following on twitter - he has a number of books on the balkans - this book is a must read.....

@MishaGlenny - on twitter


From Misha you get a sense of how frustrated journalists were with "fair reporting codes" and in general valuable personal insights.

Slavenka Drakulic


This is harrowing - she sits in and report on the mighty and the not so mighty being processed through The Hague.


A great rollicking read - great insights into the reality of life in Tito's Yugoslavia

Ivor Andric


Nobel prize winner from Bosnia - amazing tale of a bridge and its village from the time of the Ottoman empire up to the start of the WW1 - beautifully written.

Very simply introduces most of the political themes of the Balkans.

Rebecca West


Anglo Irish partner of HG Wells - rambling account of several tours of the Balkans between the two World Wars.

Leon Trotsky


This is on my wish list so can't comment until I read it - but it comes highly recommended.

Beyond this there is a world of rich Balkan Art, Culture and literature to dig into. Go for it!