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I'm a co-founder of a three-person software consultancy shop. We've been working largely on our own projects with our own clients and have occasionally helped with each other's projects quite successfully. As it stands we each own 1/3rd of this shared consultancy company.

Now a project I started and which my two co-founders are also working on regularly is going very well and we believe has the potential for investment (we're already in very early talks with investors).

Now there are two problems with this:

  1. The investment, conceptually, wouldn't be in the whole consultancy shop, but in this particular project.
  2. I'm much more heavily involved and will be quitting my full-time job should we get the investment, so splitting the ownership 30-30-30 seems unfair at first glance.

What are some things to watch out for to know when to split a project off into another company in preparation for investment?

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Any potential investor will be extremely interested in the corporate structure and will want it to conform to his requirements. My advise is to wait until you have an investor before creating additional companies. If you do it now and then find an investor you may need to go to the expense of restructuring in order to accommodate the investor's requirements.

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Excellent advice, many thanks. In addition, having the investor insist on a particular corporate structure will help avoid any arguments within our team about whether a restructuring is worth it or not - it externalizes the blame so-to-speak. Brilliant all 'round! – Daniel Gill Feb 6 '12 at 12:42

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