Hot answers tagged partnership
11
The truth is that most ideas are worthless and not unique. It is the execution that adds value.
Having said that, it may be that you can find the time to test out your idea in a small but meaningful way. If it looks like it is following your expectations, you can pursue it. You can hire people to help you, just as any other business does.
Think about your ...
5
What class of stock are you being offered? If there is more than one class (e.g. Common and Preferred Shares), the rights, the value and the opportunity to cash out may vary significantly.
What percentage of the company does this represent? This is clearly a main driver in how much this offer could be worth.
If this stock is being issued from a pool, how ...
5
If you want more answers, put your question in the first 6 lines, then move the details to after the question -- otherwise it's hard to even read the whole thing (I did because I'm passionate about co-founder issues)
It's pretty clear what you want. So here's one way to get it: simply say "I won't consider any equity deal with you unless you are full-time." ...
5
Something doesn't match here.
I have an idea that I am almost sure that it will be successful
and...
.. that is really simple to do. It just needs a blog, a twitter account and a facebook page for support...
yet...
I can spare 30 minutes per day but the problem is that the time needed
to be done properly is much more, that's why a team of ...
4
What legal sctructure do you have in place? How could you possibly "give 2% of shares" to someone and not have it properly recorded by the company? And your partner was CEO, living abroad, receiving a salary, and according to you, not doing much at all?
I think you are up for a major shakedown, where everything needs to be cleaned up and everything can be ...
4
"A good idea is worthless without impeccable execution and a commitment to iterate."
- Zach Klein
"It’s not about ideas. It’s about making ideas happen."
- Scott Belsky
"Tell anyone and everyone your idea without fear they’re going to steal it."
- Aaron Patzer
"Successful entrepreneurs are quick movers because they realize that just having a multi-billion ...
3
You seem to have successfully navigated the treacherous waters of outsourcing. That's a strong point right there.
If I understand your question properly, you are basically running out of money, so you can't pay the offshore company anymore (at least not at the desired level). Since you are happy with the quality of their work, it's ok for you to switch to a ...
3
20% is not unreasonable. Let's put it this way: it's significant. You have to decide if the business has serious potential. You should be able to tell, based on the early clients. Do you believe that more customers may be signed up soon, bringing significant revenue and growth?
Regarding the second clause, at least in the US, I would refuse. You could ...
3
In this situation it is very unlikely you are going to get anything if the business doesn't work out, you just need to make sure you are compensated enough for the gamble you are taking (ie. if the business succeeds and you end up getting paid what you would have in a normal company, that's not enough). Work out how much equity/reward makes the risk ...
3
You didn't state where you are, so I'm answering assuming you're in the US.
In LLP there's a concept of "basis". A partner is liable up to the basis of his partnership. This is similar to stock equity, except that there're no stocks. The basis is recalculated all the time based on the partner's share of income, expenses, withdrawals, contributions, etc.
It ...
3
To grow your business you will have to give time to it along with a good plan. If you are confident that your plan is good enough, you must invest more time in it.
If you can't give much time, then the only thing you can do is to plan it wisely and distribute the work wisely to the people with you. If you are giving 30 minutes to your work then you must make ...
2
I hope that "sweet equity" means "at least half ownership, and pay him while he's working". Unless you have a close personal friend, you're going to have to sell your idea to your programmer, and sell him so well he's willing to forgo the certain money associated with having a real job.
There are many crap programmers out of jobs right now, but top notch ...
2
I found this calculator very useful:
http://foundrs.com/calculator/index.php
if the one founder does not work the same time as the other, he should have a matching compensation. If founder a, working for the business, does not have a "standard compensation", he should get all, until he has a compensation which exceeds standards. Then people need to ...
2
For the techs:
Profit = (Revenue + Investment) - Costs
Revenue = SUM(Sales) + Other income like government incentives and tax breaks.
Costs = Operational Costs + Wages (including yours) + Taxes and rent + Marketing + Advertising + Production + Coffee + Growth
You get to pay dividends on Profit as a percentage of the ownership or at $x per share held ...
2
Revenue, Gross Margin and Profit are not the same things. They are not interchangeable.
The revenue you generate from each sale. It goes to pay for the cost of delivering or providing that product/service. It is not divided up among the owners proportional to their percentage of ownership. The "profit of each sale' could be interpreted as "Gross Margin" -- ...
2
Yes, you need a legal entity. If you don't establish a legal entity, then you are a partnership, and a partnership is THE WORST type of business entity you can have, for the following reasons:
1) It provides no protection of your personal assets from liabilities incurred by the business. So if your business gets sued, the courts can take your bank accounts, ...
2
This is what I personally feel:
Since the idea is yours and you are the backbone handling everything, why have partners. Rather keep them on payroll.
But asking your friends to be on payroll wont be a good idea. Secondly since you stated that
" if they are not working up to marks", so if you are unsure about it than why risk.
Outsourcing is very cheap in ...
2
You need to have a lengthy and brutally honest discussion before making any offer. Some questions:
Are you going to be in charge or at least have the last word or is this a 3 person democracy? Eventually a customer, vendor, or prospective investor will ask, "Who is in charge?" They may not prefer to deal with all of you at once.
How much of a commitment ...
2
First up, I'm not a lawyer, you will need to work through the specific IP issues for your country/state.
I think you should try to get to a middle ground, ending up in court is just going to kill all of you.
Both sides take a copy (if he has an external developer already then he has a copy that you will struggle to get back as it is) agree to fork the code ...
2
Here are the questions I'd be asking:
(1) When was the code created and when was the company formed? If the code was created before the company was formed, then it's pretty clearly owned by the developers. If it was created after the company was formed, is there any way that somebody could claim an employment relationship?
(2) Did person 1 have any ...
2
First and foremost, you need to talk to a (real) tax advisor.
Having said that, and putting a disclaimer that this answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer (circ. 230, as I am a tax practicioner), lets go over your questions:
Would the ...
2
Here's the link to the FTB definition of "doing business in California". If your LLC fits the requirements - you'll have to chip in with the Golden State. Based on what you've described, it doesn't look like you'll have to pay the $800 merely because of the investor, but do get a consultation with a California licensed CPA to ensure that.
2
I have no experience with this at all, so take my thoughts with that disclaimer:
Depending on the goal of the business, Equity could be far more valuable than profit sharing. If you are expecting an out (acquisition, IPO, etc.) then you may not have any profit (re-invest all the earnings back into the business to grow fast for a big exit). In that ...
2
~$50k yearly salary
The business is solid already and you're getting a low equity stake. You will be doing all the development, infrastructure and support work, your salary should be around $100k.
20% potential equity stake
You're part of the first layer of employees of the company. check this. if you stay working alone for two years, you deserve the ...
2
From legal perspective, he has 20% of the stock. You can't just take it away from him. It might not be very nice from your side, but can you issue 1B more stocks and assign them to yourself? Basically dilute your partner, so that he has less than 0.000001% of the company? Again, I would try to talk to him first, maybe you can agree on something...
For the ...
2
Venture Capital is probably not what you need. More likely you need a line of credit from your bank, or favourable credit terms from your suppliers. With either or both of these in place, you will be able to acquire the goods and sell them before you have to pay for them.
This is a standard way to do business, used around the world, although Zimbabwe is ...
2
I'll quote myself here:
“Release, release, release. Until you release, everything else is just talk. Before there’s real code to share, no one cares what you’re doing and almost no one will help.”
Source: https://sourceforge.net/blog/web2project/
I would also suggest reading Karl Fogel's "Producing Open Source Software" to learn about starting, ...
2
If the business legally and legitimately incurred the additional $8k then you may be obliged to pay the $8 along with the initial $10k
You should refer back to your partnership contract which should outline some key points, such as:
-Under what circumstances partners are allowed to incur additional debt without consulting other partners (re the $8k ...
2
Is this a loan or an investment?
If it's a loan, then having to pay him back soon (not necessarily first) makes sense.. but then he shouldn't own a chunk of the company, especially not 80%.
If this is an investment, then owning a chunk makes sense, but it seems his interest should be to make the company successful as soon as possible. Taking $20k out of it ...
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