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Need Business advice ASAP

Discussion in 'BlackHat Lounge' started by andreic, Oct 8, 2014.

  1. andreic

    andreic Newbie

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    Good evening (in western europe) BHW!
    I'm in need of advice from someone more experienced than me in the business and partnership field.

    long story short: I've started a project together with 2 other guys. the project consists mainly of an online shop. I cover everything technical, one guy does the marketing and the third one finances the project.
    the store is programmed to be launched in january next year.

    The problem is that we don't have anything in writing yet, and I am moving abroad for studies.
    Meaning that once I'm there, I won't be able to control anything they do, not being physically here; once the initial signing of documents, I won't really be able to do or negotiate anything else.
    The plan that we've discussed until now is that, seeing how I won't be able to dedicate any more time to the project after I start my studies, I won't get a fixed salary (as they both will), but I will remain a stakeholder, as one of the three founders.

    Should I accept these terms, seeing as I could either get f*cked afterwards or get a shitload of money from dividents?
    or rather, Should I ask for a sum upfront? Take advantage of the fact that I'm the only one (right now, until they can afford to pay someone else) that has access to the whole motherfuckin' project, and ask for them to buy me out right now? (taking into consideration the fact that without me, they would lose an online store ~3000-5000? and a few months' work)

    the project is rather big, we've been working on it for more than 6 months, and it's a bit more than a simple online store, it's more of a ... brand, that we're trying to launch. Expected profits per yer, for the 3rd-4th year are in the hundreds k?

    what do you guys think I should do?
     
  2. LostConnection

    LostConnection Senior Member

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    If the profit expectations are really in the hundreds of thousands of euros, does the little voice inside your head really not tell you to stay as a shareholder?

    Make the other two sign a written contract (if you haven't already). Just cover your bases so that they cannot force you out at any point. Then just keep an eye on the thing, if it starts flunking you need to know, if it starts profiting, you want to know.
     
  3. andreic

    andreic Newbie

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    thanks man. The numbers are supposed to look like that. Right now we're in the process of looking for external financing, since guy n°2 could only cover the basic expenses ( ~6k) that we had up until now. Just as a ref number, the external investment they're looking for is between 100 and 250k. The general field is cosmetics, and we're launching it in France. This is kind of why our initial estimates for profit are so high.

    The thing is, someone close to me personally, whose judgment I trust, adviced me to try and bail out, while I still can get anything, since it would be better than nothing; but as you said, LostConnection, the voice inside my head freakin' yells that I sould stay and secure a position.

    How could I assume control onver my part of the profit, in the given situation?
     
  4. andreic

    andreic Newbie

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    can I bump my own thread?
     
  5. Trepanated

    Trepanated Supreme Member

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    Firstly, don't base your decision on what revenue you think the business will be making in 3 or 4 years, because that's speculation and wishful thinking.

    Secondly, if you are the technical guy and you are not going to be involved any more, then my advice would be to either let them buy you out, or come up with a shareholders agreement and let them continue without you.

    You need to have a proper discussion with the others to find out what their thoughts are and then make a decision between the three of you.

    The fact you have no formal written agreement in place yet could work either to your advantage or against it, depending on how much business experience everyone has - but the fact there isn't one suggests that nobody has much, because formalising agreements is the first thing you should do when starting a new business or project.

    If it were me, my first choice would be to get bought out (if the payment was acceptable) and the second choice would be to become a shareholder.