When the company is not formed yet and is still an idea in an entrepreneur’s mind, looking for partners with various skill sets and experiences, what kind of legal risk or personal liability does one face acting in such a manner where they are looking for partners and talking to professionals?
How would you go about promising let’s say 5% equity in the company when it’s formed and bonuses on successful milestones without making yourself personally and financially liable in case the whole idea doesn’t work and we end up not forming the company and not pursuing the idea?
Convertible note. Guarantee the money via a loan where the investor decides after one year whether is a loan or investment. Keeps you from needing to update the investor at every whim and also eases.