How about thinking of it in terms of hierarchy? A JV will get you on par as equal partner. A management agreement would make them a client and you essentially an employee.
Could you carve out a minority stake in the JV/New-Company, but be the controlling manager? *JEROME CHANG* *www.BLANKSPACES.com <http://www.BLANKSPACES.com>* On Wed, Apr 6, 2016 at 11:46 AM, Tom Lewis <[email protected]> wrote: > Thanks Jerome. Yes have plugged the numbers into my master spreadsheet > that I use to run this space (with a modification to match the difference > in local demand in the ratio of coworking/desks/office), and it's as you'd > expect- I could just propose a management fee and make £XXXXX a year, or a > JV and make from -£XXXX to +£XXXXXX a year. It's all risk and return isn't > it like any other business opportunity? > > I guess I'm trying to consider there a spectrum from pure "pay me a > management fee" and "let's go 50/50"- and somewhere along that spectrum is > a balance that works for me. I've tried to look at it from their point of > view- they have a building/space which they aren't going to lose whatever > happens (though there is the opportunity cost of rent if they let me have > it). They've also got pretty much unlimited access to capital. I've got > the skills and the proof that I can make it work. I'm guessing there's an > element from their side of using a workspace element to smooth the way > through the local authority planning process (ie "yes we're building a > hotel but we're replacing lost commercial space too"), so I have a value > there. I just don't know whether to go in at 50/50, or 80/20, or with a > commercial management fee plus less equity, or more equity and a subsidised > fee. > > Aware that all of these are things I need to figure out myself, maybe just > helps to think aloud! > > Cheers > > Tom > > On Wednesday, 6 April 2016 18:53:12 UTC+1, Jerome wrote: >> >> Congrats on this opp! >> >> Have you built a quick biz plan/pro forma to see what kind of #'s are >> required? That'll help dictate whether you'll do a JV or management >> agreement. In general, I think you should build in payment for your tech >> and you, but you might consider a base payment/management fee plus a % of >> the upside, whether that's thru equity or just gross revenue (a la >> franchises) >> >> >> *JEROME CHANG* >> >> *www.BLANKSPACES.com <http://www.BLANKSPACES.com>* >> On Wed, Apr 6, 2016 at 10:39 AM, Tom Lewis <[email protected]> wrote: >> >>> Saw someone bumped an old thread about JVs and it's prompted me to reach >>> out for some help/advice/thoughts about a major opportunity I have right >>> now. All opinions welcome! >>> >>> So, as many of you know, I run The Guild in Bath, UK- 3500 sq ft- >>> established 2013- 150 members. Full with a waiting list and negotiating on >>> a new 12k space to grow into. My obsession is automating all the boring >>> stuff so my team can concentrate on making our members day from the moment >>> they walk in. I have never written a line of code in my life, and I use >>> the miracle of Zapier together with a billion cloud based tools (most >>> notably Nexudus and Podio). >>> >>> I've now got to the point where this place runs so well without me I >>> don't actually need to come here. I'm spending most of my time trying to >>> open Guilds elsewhere, but it's a tough call right now here in the UK, >>> which is having a major commercial property boom alongside a crazy law >>> which allows anyone with a commercial property to convert it to residential >>> without needing permission- so transferring rare commercial property into >>> red hot residential property at a time that the UK is in a major >>> residential bubble. It's made property deals incredibly difficult for us, >>> and more so given that there's now an added dimension here in Bath- >>> developers are going crazy for student developments (we're a two university >>> city), and even more commercial properties/offices are going away forever. >>> >>> Anyway, in the midst of all this I've been approached by someone who >>> wants to do something with me . This guy is major league. I can't say >>> who, but you will have heard of him- he's founder and head of a global >>> fashion brand. He came in when we opened and stayed in touch. He's got a >>> property fund, and specialises in creating mixed use developments >>> (residential, hotels, offices, leisure on one site). >>> >>> So, this guy has aquired a plot of land and wants me to come up with a >>> concept for a hub within a development they are proposing. The inference >>> is that if we can build something together in this first plot, then we'll >>> be popping up whenever they develop other sites. So whereas now it's a >>> office, a hotel, a restaurant and a cinema, in future he'd drop in all that >>> plus a Guild. >>> >>> I know the plot and the area is ripe for a coworking space. The demand >>> isn't an issue, and the model I've built here is sound. It's a 9000 sq ft >>> space, with 5m height in some areas, and that's all I've been given. >>> Before we go any further, he's asked me what I'd do with it and on what >>> basis. I know these guys have worked on shared revenue/JV basis before, >>> but I don't know on what exact basis, so I'm keen to come up with a >>> sensible proposal. >>> >>> Given all that, does anyone have any similar experience, or advice on >>> what to suggest. Assume I know all my numbers, so that's not an issue, and >>> profitability isn't an issue. I don't have any capital, or the covenant to >>> sign a straight lease, and this guy can help with both of those, either by >>> providing a capital contribution or guaranteeing lease finance etc. In >>> return, I'm guessing we should create an SPV and do a profitability/equity >>> split, right? What I'm not so sure on is how that should work- should I >>> build in payment for myself and my tech or should I leave that out as >>> that'll shake out in the profit share, otherwise I'm double dipping? >>> Should we go for rent free or would the landlord expect a rent from the SPV >>> even though they are an equity partner? >>> >>> As I say, I appreciate this is something I need to get more formal >>> advice on, but thought I'd just throw it out there, in case anyone can help >>> with ideas or advice, or if there's anyone out there who could sell me some >>> time/knowledge. >>> >>> Cheers >>> >>> Tom >>> >>> -- >>> Visit this forum on the web at http://discuss.coworking.com >>> --- >>> You received this message because you are subscribed to the Google >>> Groups "Coworking" group. >>> To unsubscribe from this group and stop receiving emails from it, send >>> an email to [email protected]. >>> For more options, visit https://groups.google.com/d/optout. >>> >> >> -- > Visit this forum on the web at http://discuss.coworking.com > --- > You received this message because you are subscribed to the Google Groups > "Coworking" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > For more options, visit https://groups.google.com/d/optout. > -- Visit this forum on the web at http://discuss.coworking.com --- You received this message because you are subscribed to the Google Groups "Coworking" group. 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