Equity and dividends/revenue sharing in a small business/startup

[constantlm]

Hi all,

How would one approach equity and revenue sharing when you have the opportunity to join in on a startup? As I understand it, equity does not necessarily mean dividends/revenue share. If dividends in a small business is a slice of the monthly income after expenses, how do you set conditions for when the business starts paying out? In my first business I joined in as a partner, I have the minority share of the business but we discussed that all three of us take out the same salary, which we don't have on paper, but discussed prior to going into business together.

I'm completely clueless in this area and any insight/advice would be great.

[Garf]

Is there a partnership agreement or so you have a third share in a CC or company? Whatever get it in writing. List the agreement between you and get an expert to write it up into a legal document. Good friends can end up the worst of enemies in the event of there being too much or too little money.

[Blurock]

The worst mistake you can make in business is to assume that things will be OK. Get everything in writing. Make sure that there are minutes of meetings. Take notes and see that the minutes are in sync with your notes. There must be the utmost transparency and clarity regarding agreements, responsibilities and remuneration.

Cross the T's and dot the I's and you won't be sorry afterwards.

[Justloadit]

Part of the agreement, right this very moment is the exit stratergy - when someone wants to leave, or you want to get rid of someone, while you are still friends, get the process into place in the procedure that must be followed. Payouts, returning of the share, loan accounts, etc. It is easy when everyone is happy and positive to get the procedure right. When everyone is fighting and there is no procedure, this is when the sh!t hits the fan.

[Barker Hicks]

Hello Community,

Ways to Fund Your Startup Business:

1. Personal savings
2. Partner savings
3. Sell your stuff
4. Windfalls
5. Barter and resell
6. Retirement savings plan
7. Credit cards
8. Credit card arbitrage


Thanks and Regards,
Barker Hicks