JustDoItForever
Posts: 2
Joined: 7/26/2009
Status: offline
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Ok here is a scenario and I need some advice from the experts here. This is a query on joining in a business with the owner who needs help to expand. I am not too clueless as to think there aren't tons of variables in every "situation," but I need to know the far right and lefts of the situation so at least I know if I am on the right track and/or who is being unreasonable.
Here is the info I have to help you help me:
John (the owner) has asked me if I could help him grow his company. I said yes, He has seen my resume, history and education ad knows I will be a great fit, in his own words, and his hope is to eventually let me run most of the day to day while he ventures onto another one of his projects, and then wishes for me to join him on that process as well. I.e., it has been pretty well agreed that he is not looking for an employee, but a partner who is just as capable, if not more, of running and expanding the business while having a good knowledge of many aspects of the specific business.
The company's profits and gross are unknown and it seems unlikely that it will be divulged to me in full. My guess is that it grosses about $100k per year if I had to pick a number. However, he states that most of these earnings go right back into the company, so he has very little profit left to play with in the end. Therefore, to me, he seems to be saying that his profits a very low or insignificant.
His proposal to me was to offer me 15% of the company, with no other compensation at all (monetary or otherwise), while he requests I do 15 hours of real work per week for him/his company. He is willing to put the 15% agreement into an escrow, where after a 3 month "probation" period, "IF" he thinks he can still use me, then I will be awarded that equity. If not, we walk away, very little (couple hundred dollars at most) to no compensation.
My proposal was to obtain 20%, and send out a delayed invoice every month at a reduced hourly rate from my normal rate, which he can pay me IF and AFTER we part ways, since he has "no funds to pay me" at this time. I have also reduced my hourly wage by 60% of my normal rate. But one of my advisors told me don't even go there, just ask for an hourly of $30 (never less than 60% he says) that has to be paid every week.
He had also talked about sending me some additional independent business, which at this time, he has retracted, so no compensation at all there either.
If it gives you a better basis to give me advice, the business is a "laptop repair service." There may be about 4-5 others who are doing the same thing in our county, who are larger and more established than his. However business is pretty good overall, enogh to share, but to dominate, it will take something special, which I can provide.
Anyways, from your experience, please let me know your unadulterated opinions on this "deal" and how it "should" pan out.... thanks!
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