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  1. #1
    oldscout is offline Junior Member
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    How much should a Managing Partner expect to make? Equity share?

    I'm just now launching my new venture that I funded 100%. I did everything necessary to bring this project to the launching pad - even driving the truck to install at the first location. I have every reason to believe it will be a success and I want to scale-up the venture in the near future to multiple locations.

    My problem is I'm out of cash. I've spoken to certain persons (prospective partners) who expressed interest in funding my build-out.

    My question: If the prospective partners put up 100% of the cash and I do everything to make the venture work, how much should I expect to receive in terms of equity in the business?
    Last edited by oldscout; 08-07-2010 at 05:53 PM.

  2. #2
    mattnelson is offline Senior Member
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    Don't forget if it is all falling under one 'company' you have already invested the capital for the first location. therefore they are not funding 100%

  3. #3
    KyleXY's Avatar
    KyleXY is offline Senior Member
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    Not enough details to provide an appropriate answer.

  4. #4
    Encrypted's Avatar
    Encrypted is offline Moderator
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    What Kyle said.. How much additional funding are they giving you and how much funding did you put into it?
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  5. #5
    BizDoc's Avatar
    BizDoc is offline Junior Member
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    You would proceed the same as if you were both starting up a venture. Compute your equity by summing sunk costs, sweat labor, and current valuation (usually multiple of earnings). Then determine the total needed and based on the total, apportion your respective percentages.
    Hire an attorney who represents only you - not the business - to advise you.
    A couple things: be careful but be fair. Don't let someone steal your company but don't be greedy either. Better to have 60% of a tangible business than 100% of a worthless idea. If you forfeit controlling interest (in this market you'll find that's usually the case unless you're VERY seasoned or have a truly world-beating idea), ensure your interests are aligned and that you have a buyout clause.
    Good luck!
    Regards,

    Chris
    BizDoc@emailias.com
    Ingenious Business Tips at http://bizmd.blogspot.com


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