How to allocate shares between us and the investor?

Good afternoon, colleagues!

At the moment my friend and partner are in the process of launching a new business. Through trial and error we finally found a great niche, which is in serious need of a particular product. The need was identified empirically via long immersion in the environment, gather feedback and analysis of performance.

In this niche already present products of our type, but they are available to certain private groups. Created these products initially for these groups. They are, simply put, help you earn more money over a shorter period of time.

There are a wide range of audience, which is in dire need of addressing with the specific nature of this type of business. We know exactly how these problems optimally and efficiently solved.

In this market there are several current players. Their solution was carefully studied, collected user feedback and the conclusion was that these platforms do not satisfy the needs of the people do not solve problems in the measure in which we can solve them we.

We know how to solve them more effectively and efficiently. To all, we see our platform in a completely new market for this format. This format is optimal from the point of view of convenience for the end user and the profitability of the project.

At this stage we have already the first version of the prototype, hot audience that is willing to pay for this product, the investor who may want to invest in this business.

We have a question with how to distribute and share between us and the investor.

What it is useful for us besides being ready to invest in development?

It has the impact on a certain group of people who are our direct clients. He can immediately start the process of monetizing a business, reducing start-up time. In this case, we work 50/50%. He leads his people, we are giving a product that helps to earn more. People pay product. Profit divide in half. He is the owner of this group. We, as the people deciding his and their problem. He, as the investor earns on the platform and their group, because they want this product and happy to use it/pay for it.

If the figures, about 3000 people from his group are willing to pay a monthly fee for using the platform average of $20 per month each.

Also, this person has a good influence among other similar structures with an even greater number of people.

Question # 1: Specifically, the investor can make a significantly large contribution to the monetization of the project, launching sales in the first months of operation. He has a large audience that is willing to pay. The investor is willing to show our product to other interested groups of people.

What percentage you can give your partner, which additionally attracts a large cash groups in our business?

Question No. 2: what do You think, what percentage you can give a man, if he now acts as the investor and makes a large contribution (clients, tools) to launch the business at the very start? At the moment the investor was offered 10% of the total profits of the company. This percentage seems to him too small. We greedy?
July 9th 19 at 13:08
5 answers
July 9th 19 at 13:10
Solution
IMHO, a professional lawyer and competent contract
M. b., it makes sense to try to do without an investor
July 9th 19 at 13:12
Solution
The investor is talking to you, he is able to determine how much he wants. Otherwise he is not an investor. The numbers can be completely arbitrary. If you do not have monetization and you can't move further - the investor will take more. As soon as the project starts small, small to pay off the investor the share is sold for the same price at times less.
I would like to clarify this point ,because if the investor owned a share in the company ,then the development of the company this percentage has been or will fluctuate in proportion with the invested funds ? - Madge.Hauck commented on July 9th 19 at 13:15
July 9th 19 at 13:14
From what You describe - You are greedy. I could calculate so - would take a period of self-sufficiency (or the period for which You will come to the desired level. You have something like a business plan?). Calculated the profit for this period, if You will do without investors and with him. The ratio of these numbers and will share the contribution. If the share of contribution of the investor is too high, there is a suspicion that a product nobody needs and we must cling to the investor. If small - there are numbers on which to justify the investor a share. All this, of course, IMHO.
July 9th 19 at 13:16
well, despite how much he puts
he buys in fact part of the company, you do not properly consider the issue
in fact it should be ohrenschall you earn , the investors are not invested for this
that is, the investor invests by buying part of the company, then to its turn a profit.
That is bought for a million, sold for one hundred million.
If it is about a big company and the ultimate goal of selling. Domestic investments are typically made for passive income... - Madge.Hauck commented on July 9th 19 at 13:19
July 9th 19 at 13:18
Greedy! Although I don't know what you have there in numbers, there may be a share of his money and influence so insignificant that you share this view...
The investor is not just counting on the deal, he essentially buys a risk that you're going to shit, and its share will be a share in a pile of your shit.
You have done the work definitely worth the money you invested in the project their time and opportunities, and if the investor except money, invests its time and opportunities, and to treat it accordingly...
...and evaluate this contribution as mercenary work would be unethical

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