Scot
Salad Dressing Empire
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Here's an idea that some VC's and startups are currently doing. Do an equity earn back.
It gets a little more complicated and do not do this without a business lawyer involved.
It looks something like this. VC funds you and gets overwhelming majority of ownership. Something like, 90%+
You set obtainable time oriented bench marks. Each bench mark grants you a percentage back of the equity:
If you become the next Zuckerberg, you get the majority of the business back and they wont mind being in the passenger seat on a 8+ figure rocket.
The numbers and scheme above are completely made up, so research the hell out of this if its something you want to do.
But its a derisk for everyone involved. Because if you tank this business and accrue massive debts and tax liabilities, the 90% owner is the one on the line, not you. Something to consider.
It gets a little more complicated and do not do this without a business lawyer involved.
It looks something like this. VC funds you and gets overwhelming majority of ownership. Something like, 90%+
You set obtainable time oriented bench marks. Each bench mark grants you a percentage back of the equity:
- Gain 20,000 Daily active users by month 12 - 10% equity grant
- Reach $100,000 in revenue by month x - 8% equity grant
- Reach $500,000 revenue by month x - 15% equity grant
- etc etc
If you become the next Zuckerberg, you get the majority of the business back and they wont mind being in the passenger seat on a 8+ figure rocket.
The numbers and scheme above are completely made up, so research the hell out of this if its something you want to do.
But its a derisk for everyone involved. Because if you tank this business and accrue massive debts and tax liabilities, the 90% owner is the one on the line, not you. Something to consider.
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