Situation: Ok here is the situation. I am in negotiations as a partner in the formation of a software start up company. My responsibilities are the development of a go to market strategy, sales and marketing. For my efforts in doing so, I (my company) will be issued a 10% equity stake in the company as well as 10% residual commissions on secured clients. I currently own and operate another business so I will not be an employee or on a salary of this new joint partnership. The software system is currently owned by another independent company, however, we (new partnership) have an exclusive contract to sell the software with the option to purchase outright. We are currently speaking with interested investors to fund the purchase of the software and it's likely to happen soon. My partners involved currently own 2 other businesses that are profitable and both companies use this same proprietary software. The entity that I will be an equity shareholder will be one of the three businesses under my partners parent company. The 2 other companies are already established with revenue streams. Because my partners currently own and operate the two other business that use this propitiatory software, the funding of the software purchase will be done under the parent company as an asset. I will be a shareholder in 1 of the 3 companies under the parent company.
Question: The company that I'm involved in as a shareholder has the highest earnings potential and will likely become the primary revenue generator for the parent company. Through my sales and marketing efforts in the generation of revenue, I will be contributing a significant amount of value towards the asset "the software", however, that asset will not be owned by the company in which I have an equity stake. It will be owned by the parent company. I don't feel as if I'm obligated to any equity ownership in the 2 other business under the parent as I was not involved in growing them. However, the intent is to build this parent company for sale as an exit strategy. Any ideas on how to insure that the revenue generated from my efforts can be evaluated proportionally to overall value of the parent company in an event of a sale?
Proposed Solution: The discussed solution (nothing has been signed) would be a contractual agreement that in the event of a sale of the parent company, the shareholders of the parent company would be allowed the opportunity to value the percentage of each company under the parent company. Should I not agree to this internal evaluation, a 3rd party independent evaluation should take place.
Suggestions: Does anyone have any ideas on a better way to allocate asset value in this scenario? Or anyone with a magic ball into the future have advice to lend?
