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How to divide shares (money?) at the very beginning (at the idea stage)? Please help

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  • How to divide shares (money?) at the very beginning (at the idea stage)? Please help

    Hey,
    my name is Luke I have a dream. It was a dream for a long time. Until I realised that I can do it.

    My own company. A clubbing portal for a big city. I worked in clubbing industry for 6 years now). With time, I got really deep into the social media marketing, I investigated the market, found my niche, and I am very ready to get started.
    I got 2 (long time) friends, that are web developers, I shared my ideas with them, we had a few brainstorms, they got hooked on it as well, we started.

    But today, my friend asked me how are we dividing things. Shares, profits, how much do I want, what's the order in it? It struck me like a lightning, but ... he is right.
    We need to decide upon it before we start arguing about money and eventualy - destroying our friendship.

    I seriously, don't even know where to start, or even how to start my search query. I think the groups on linkedin are full of professionals who could share their experience and guide me with links or articles.

    I will tell you a few words how i see it.
    It's my dream, that I developed with time, well before I got in touch with my friends. I showed them my ideas and we took it from there. I want to stay as an owner, founder (shares?), but at the same time I feel that if we work on it equaly, it should get divided 33% for each of us? They are my friends, I dont want to sound rude, but then again, with time I dont want to loose my company to someone else, if, all of a sudden, something goes wrong, and everyone follows their own path.

    This is my first post here, please don't get upset with me if I posted it in a wrong place.

    Looking forward to hearing from you.
    Best regards
    Luke

  • #2
    You're asking about "capitalization tables". If you want to be serious and put it in writing, here's some information on how to make one. I imagine you will have to invest in a lot of assets, so this table can help to also split the liabilities based on how much you all invest.



    Additionally, if you are serious, I recommend filing for incorporation before you start investing too much money into this venture.

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    • #3
      Consult an attorney.

      Maybe there are discounted ones in your area.

      Do you understand the difference between general partners and limited partners, and the different business entities?

      Comment


      • #4
        Originally posted by jteezie View Post
        You're asking about "capitalization tables". If you want to be serious and put it in writing, here's some information on how to make one. I imagine you will have to invest in a lot of assets, so this table can help to also split the liabilities based on how much you all invest.



        Additionally, if you are serious, I recommend filing for incorporation before you start investing too much money into this venture.
        Great link and advice.

        Sounds like LLC might be more appropriate than general partnership in this case, but an attorney would know best.

        Anyone know any good message boards for entrepreneurs?

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