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Right now there are 4 partners,
Myself at 51%
Two at 21%
And one at 7%
Legally on paper I own 100%. We haven't sat down and signed any papers yet.
Through networking I met an individual who owns another company and has a little money. He's been wanting to start a company like mine for a little while now. Honestly it seems like a perfect business partnership. When I first met him we talked for like two hours about how trading time for money is slavery and how he thought I was smart for not going to college. He never did either. We get a long pretty well and I like the mind-set he has.
We met and talked. He wants to be a partner. Here is what he is offering.
- Outright buying a piece of equipment for the company ($30k- $40k)
- Fronting money for a few other things ($5k- $10k) he would be paid back overtime from the company.
- Use of his employees
- Use of his secretary to answer all inbound and outbound calls and to do scheduling
- Use of his land and storage facilities
- Storefront/office location on the same piece of land
- Handling tax side of things
- He also has a giant a$$ billboard on a busy highway I can use
- Use of his business systems
- He would be an active partner
- A few other things
To sum it up, he would pretty much provide about 90% of the business structure and automate a significant portion of my company. And he is providing I'd say near $100k in money and assets. He would be propelling the company leagues ahead overnight. It would take me years to get these things internally.
What he wants
51% of the company
*None of the assets would be placed in the company. Which I foresaw and understand.
He's a cash flow guy at this point. He wants to pull money out.
My main concerns
The two partners at 21% would need to be removed. They provide no where near the value this guy would. They haven't invested any money or really done too much work to this point. From a purely unbiased business perspective it makes sense to cut them. But personally I don't feel too good about it.
We would create a new operating agreement. Voting rights and control wouldn't be based off percent. Not sure how we would do this. The third partner at 7% has no voting rights.
Obviously I want to retain 51%. But he is bringing a lot of value and leap frogging the business. Thoughts?
I'm also worried about him providing pretty much all of the systems and automation. In the future when the company is heavily dependant on the systems he could threaten to pull them if he didn't get what he wanted, or for whatever reason. I can't ask him to place these things in the company. That would be ludicrous. I'm thinking a non-compete and some other writing saying he has to guarantee the use of everything unobstructed for X years.
My reasons for believing I deserve 51%
- He is an active partner. But at the end of the day he has other business ventures. It is impossible for him to put in as much time and work as me. I'd be out on most of the jobs supervising. The business would get far more of my time and energy than him.
- His risk is pretty minimal. None of the assets are in the the company. He is pretty much lending the use of resources he already has. If the company went under he wouldn't lose anything really.
- I'd say my risk is higher. Everything I have is in this company. My only income comes from this (and the guard) if the company went under I would be far more affected than him.
I'm on a bus right now going to a month long field training. I have plenty of time to consider things and would love to get some opinions.
Myself at 51%
Two at 21%
And one at 7%
Legally on paper I own 100%. We haven't sat down and signed any papers yet.
Through networking I met an individual who owns another company and has a little money. He's been wanting to start a company like mine for a little while now. Honestly it seems like a perfect business partnership. When I first met him we talked for like two hours about how trading time for money is slavery and how he thought I was smart for not going to college. He never did either. We get a long pretty well and I like the mind-set he has.
We met and talked. He wants to be a partner. Here is what he is offering.
- Outright buying a piece of equipment for the company ($30k- $40k)
- Fronting money for a few other things ($5k- $10k) he would be paid back overtime from the company.
- Use of his employees
- Use of his secretary to answer all inbound and outbound calls and to do scheduling
- Use of his land and storage facilities
- Storefront/office location on the same piece of land
- Handling tax side of things
- He also has a giant a$$ billboard on a busy highway I can use
- Use of his business systems
- He would be an active partner
- A few other things
To sum it up, he would pretty much provide about 90% of the business structure and automate a significant portion of my company. And he is providing I'd say near $100k in money and assets. He would be propelling the company leagues ahead overnight. It would take me years to get these things internally.
What he wants
51% of the company
*None of the assets would be placed in the company. Which I foresaw and understand.
He's a cash flow guy at this point. He wants to pull money out.
My main concerns
The two partners at 21% would need to be removed. They provide no where near the value this guy would. They haven't invested any money or really done too much work to this point. From a purely unbiased business perspective it makes sense to cut them. But personally I don't feel too good about it.
We would create a new operating agreement. Voting rights and control wouldn't be based off percent. Not sure how we would do this. The third partner at 7% has no voting rights.
Obviously I want to retain 51%. But he is bringing a lot of value and leap frogging the business. Thoughts?
I'm also worried about him providing pretty much all of the systems and automation. In the future when the company is heavily dependant on the systems he could threaten to pull them if he didn't get what he wanted, or for whatever reason. I can't ask him to place these things in the company. That would be ludicrous. I'm thinking a non-compete and some other writing saying he has to guarantee the use of everything unobstructed for X years.
My reasons for believing I deserve 51%
- He is an active partner. But at the end of the day he has other business ventures. It is impossible for him to put in as much time and work as me. I'd be out on most of the jobs supervising. The business would get far more of my time and energy than him.
- His risk is pretty minimal. None of the assets are in the the company. He is pretty much lending the use of resources he already has. If the company went under he wouldn't lose anything really.
- I'd say my risk is higher. Everything I have is in this company. My only income comes from this (and the guard) if the company went under I would be far more affected than him.
I'm on a bus right now going to a month long field training. I have plenty of time to consider things and would love to get some opinions.
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