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Re: Re: [newtech-1] Business Question

From: Jimmy M.
Sent on: Sunday, December 9, 2012 11:48 PM
Hey all,

I really appreciate your insight into this. Definitely have given me A LOT to think about. Any other perspective would be greatly appreciated. It seems that the best course of action would be to reach out to a few professionals (ie, attorneys/accountants) to help out further. Please reach me off line to if you have an opportunity to chat.
 
Thanks!

Jimmy Miño
Owner
Virtual Properties
o:[masked]
m:[masked]

www.virtualproperti.es


From: Victor Olex <[address removed]>
To: [address removed]
Sent: Sunday, December 9,[masked]:29 PM
Subject: Re: Re: [newtech-1] Business Question

Yaniv,

I am a believer of putting one's money where their mouth is. Therefore even if it is only a few thousand dollars have that person contribute financially to the business. Another option would be to wait until indeed he brings that big client and to discuss then the equity reward instead of commission pay out. In other words, once the big commission is paid out he will have the money to invest in the business. With the money in hand if he still wants in that to me indicates commitment.

With regards to valuation, sadly what you already put into the business is not relevant. Assets and future earnings are and so if having a partner is critical to growing those then you should consider doing it. As others have mentioned writing a sound operating agreement is important and typically begins by adopting a standard one and amending it to fit your situation.

Last but not least, I think that in closely held companies it is important to make sure that partners' respective goals, expectations, financial maturity, wealth and where they are in life are well understood and compatible with each other. For example a well to do retiree partner will likely have more stable outlook than a 20-something who is about to get engaged and will may soon need money to buy a house. Conversely, chances are you will get more enthusiasm for work from a young and hungry person.

Good luck.

Victor Olex

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