This won't suit everybody. But I have a contract with my development team that gives them the EFFECT of having equity as follows. (They are not employees, but a separate business in their own right, to whom I outsource the technical development).
They receive a small % of my entitlement to any............ - 'outcome' (eg trade sale) - operating profit (less expenses, which are defined, and include transaction costs associated with liquidity event/s) They give me in return......... a discounted rate on development This works for them because: - it's clean: they can participate in the upside without it taking up their headspace (which they have to give to a couple of JVs they've got in which they DO have equity). And they avoid any director's liability. It works for me because my ownership structure is clean, making it a better proposition for investors, as some others have said here. The trigger for paying them out is: when I lose control of the company. The assumption here, of course, is that any investment 'this side' of losing control will be for the purpose of reinvestment/growing the business. And not to get me to the Bahamas. This arrangement hasn't been tested yet, so I recommend it tentatively. The good news is: if and when unforeseen circumstances arise (eg me creating a new joint venture with a third party business), my developers and I can have a discussion about it and cover it off as a new schedule at the back of the Agreement. I had commercial lawyers draw up the contract for me in the first place, which I'd highly recommend. There are some lawyers like Brett Eagle and Cameron Billingsley who specialise in venture capital, on either or both sides of the fence. On Nov 11, 9:53 am, "Hendro Wijaya" <[EMAIL PROTECTED]> wrote: > Hi All, > > My name is Hendro and this is my first post here. :) > I'm curious on how the agreement works for the company that want to give > their employees some stocks options (like Google / Microsoft for example). > Are they talking in terms of % like "I give you 0.02%?". That doesn't sounds > so appealing. > > I have a plan to hire some early developers. They will be given some salary > like usual but, to ensure they have common interest to drive the company > forward, I would love to do some profit sharing scheme in a scalable way. > > Any thoughts? > Thanks! > > Cheers, > Hendro --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
