Local Corporate Tycoon Offers Partnership... To Be Or Not To Be?

by Daniel Molano

Posted: 15 years ago 28 replies

INTERNET MARKETING

Hey guys and gals,

I could really use some advice right now.

The other day I was reading one of Jeremy Kelsall's threads (http://www.warriorforum.com/main-int...fline-gig.html) and it had me laughing my arse off. But not for the reasons you would expect.

Those sort of things mentioned do indeed happen, and I'm talking from personal experience. One happened to me on the very same day that thread was posted.

Maybe not as exaggerated, but definitely along the same unbelievable lines.

Here's the deal, and I truly need the help of all Warriors in order to make this decision.

Recently I was approached by a local corporate tycoon with a business proposal. He said he found me via my blog's global "business consulting" ranking on Google, I guess it really does help when you're ranked above IBM.

Initially he was interested in my Corporate Internet Business Consulting, but after I pitched it he wanted more.

Anyway, this guy wants to start the very first marketing and publicity agency specialized on internet marketing here in Mexico.

Wait, it gets better... He wants me to run it and I would own 40% of the entire company itself (same as he would, the remaining 20% is divided between 2 other partners, both of which are friends of mine).

However, there is a catch. A big one.

I would have to drop my current operation, and surrender all assets to the new company. Including my sites, one of which is valued at around $1,000,000 USD. Everything would be absorbed. (This is currently under negotiations, I'm trying to take it out of the deal).

And since the company is new, my salary would be crap. Not even 1/30th of what I'm currently making to begin with.

Nevertheless, the potential is gigantic...

I would have access to all his corporate contacts and connections that I am certain he has (I'm talking multi national billion dollar corporations). I've already been introduced to some really hard hitters.

The best part is that the spanish market is extremely untapped in terms of internet marketing. That's on all levels (small, medium and corporate).

And I would have a huge budget to play with. Not to mention a gorgeous office, and some pretty amazing staff of professionals under me.

What should I do? This has been the most significant crossroad of my life so far, and I have no idea what path to take.

It would mean betraying the entire reason as to why I got into internet marketing in the first place...

Going back to an actual job, and eventhough I would be the boss and half owner, I would still have to answer to the other people.

And you know, fixed schedule, hours etc... (Also under negotiations).

I have absolutely no experience in running a company of that nature. But I would still be doing what I love, know, and I'm passionate about - Internet Marketing.

The guy runs and is owner of a $50,000,000 USD company. It could prove to be a great learning experience. I would be side by side with a guy that definitely knows what he's doing offline.

So the question is, Warriors. What would you do in my position?

All help and advice is greatly appreciated.

- Daniel Molano

#corporate #local #offers #partnership #tycoon

tonyscott 15 years ago

Hi Daniel,

Politely decline

You are where you are because you are self determined. In addition if someone asks you to give up everything you have because they are dangling a big carrot, you can bet that the carrot is a mirage ... you already know this.

From what I've read of your previous posts, offer to consult at whatever your rate is for top end clients. Safe and possibly lucrative at the same time.

Good luck

Tony
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Scott Ames

15 years ago

I think you just answered it. See below.

What good is more money if you are not happy? You seem to value your freedom but you are considering giving that up for more money. Money should give you freedom but this option makes you a slave to money.

It sounds like you make plenty to make yourself happy unless your goal is billionaire status and you have an exit plan that is not too far in the future.

Originally Posted by Daniel Molano

Hey guys and gals,

It would mean betraying the entire reason as to why I got into internet marketing in the first place.

Going back to an actual job, and eventhough I would be the boss and part owner, I would still have to answer to the other people...

I would have a fixed schedule, hours etc... My internet marketing freedom and flexibility practically taken away.

Worst of all, I have absolutely no experience in running a company of that nature.

So the question is, Warriors. What would you do in my position?

- Daniel Molano

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Traci 15 years ago

I didn't write this (I think Bruse Wedding put it up on his board at one point) but it's something to think about in your situation.

************************************************** ********

An American tourist meets a Mexican fisherman resting on the shore. He asks him how long he goes to fish everyday "Not very long," answered the Mexican.

"But then, why didn't you stay out longer and catch more?" asked the American.

The Mexican fisherman explained that his approach is to only catch how much ever he and his family needs on that day.

The American asked, "But what do you do with the rest of your time?"

"I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, have a few drinks, play the guitar, and sing a few songs...I have a full life."

The American interrupted, "I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers. Instead of selling your fish to a middle man, you can negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City, Los Angeles, or even New York City. From there you can direct your huge enterprise."

"How long would that take?" asked the Mexican.

"Ten, perhaps twelve years," replied the American.

"And after that?"

"Afterwards? That's when it gets really interesting," answered the American, laughing. "When your business gets really big, you can start selling stocks and make millions!"

"Millions? Really? And after that?"

"After that, you'll be able to retire, live in a tiny village near the coast,
sleep late, play with your children, catch a few fish, take a siesta
with your wife, and spend your evenings having a few drinks and enjoy
your friends."
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Ken Leatherman

15 years ago

Daniel sounds like to me he wants you to give up your assets to bankroll his business. Where are his assets for the 40% he is getting?

Next find out everything in the world you can on this dude. Because if he is the one bringing in the other 20% invest they could be his wife and kids which in effect would give him total control of the partnership.

What expertise does he bring to the ball game. Ask, Ask then ask more questions. Find out who his banker is and what is his credit rating. get hooked up with your own lawyer and accountant, don't go into this thing with your eyes and ears closed.

Potential earning and what you already have are 2 different things.

Ken
The Old Geezer

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KenJ 15 years ago

Stay in charge of your own destiny.

I did this by resigning my job in 1989 and never looked back. I am unemployable now as I know how a business works. I know you run a tight business ship from what I have seen here. Do not give this up.

all the best

ken
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Daniel Molano

15 years ago

Thanks everyone for the feedback. I truly appreciate it.

I'm still not sure what to do though...

It could be a huge opportunity, and since I will practically own half of it, I can always train and place someone else to run it eventually.

I would definitely be more productive, I would have supremely capable people to work with at my disposal, and my budget as a corporation would be 100x larger than what I currently have to play with.

The potential is enormous. I just have to figure out if the cost of opportunity is worth giving up some freedom and flexibility. After all, I would still be doing what I love and what I'm passionate about.

If I didn't see potential in it, I wouldn't even be deliberating.

Originally Posted by Ken Leatherman

Ken,

Thanks for the reply.

The entire monetary investment and venture capital will be placed by him.

Including the office and all fixed assets. Basically the entire business operation will run on his money (at least to begin with).

He will also provide the corporate lawyers, the accountants, and his connections/contacts are impressive. I would practically have 3 corporate accounts on the first month already.

I'm still trying to negotiate leaving my assets out of the agreement, after all I'm releasing my know how and work to the company.

The other 2 partners are actually friends of mine, so I'm not worried on that aspect.

But I will definitely do as you suggest and dig on it deeper.

Thanks again,

- Dan

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SeanIM

15 years ago

There is no excuse for this 'salary might be low because of it being a new business'

I call bull___t on that one. Esp if this guy is some 'big player'...what's his excuse for not being able to compensate you well during the startup of this business?

I wonder if this would be an honest answer from him:
"I like to treat my new execs poorly because I'm a cheap corp slave driver and want to milk you since I'm dangling major name/contacts infront of you."

I've had someone dangle apples infront of me before...sometimes you just have to quash that potential 'dream' scenario right off the bat and ensure it's in writing on the upfront. If he's asking to give up your business that you've built to date...what is protecting you if he doesn't fulfill these fantasy contacts into your front pocket?

Also I'd require a fair amount of executive / schedule flexibility that you'd want. I'd not give that up, esp for a 'low salary' job...

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Daniel Molano

15 years ago

Originally Posted by SeanIM

Hey Sean,

In the negotiations so far I have actually agreed with the salary part, the initial offer was a 6 figure salary and 5%-10% of the company.

Obviously 40% and a 5 figure salary is far more profitable in the long run provided a succesful business. And it makes sense not to decapitalize my very own operation.

But you're right, I know what to do now.

I'll deal my cards on the table and if he refuses my terms then I will politely walk away.

Thanks a lot everyone,

Dan Molano

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Lance K 15 years ago

Originally Posted by Daniel Molano

It could be a huge opportunity, and since I will practically own half of it, I can always train and place someone else to run it eventually.

Ownership without control is a mirage.

I wouldn't even contemplate letting my business assets be "absorbed" by another entity without receiving a controlling interest in that entity in return.

If they won't give you a controlling interest, make them buy your assets (if you want to procede with a deal). And also negotiate yourself a nice iron clad golden parachute.
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Pat Ordenes 15 years ago

Agree with all above Daniel...
You seem to enjoy working with warriors and you make a good income online.
You control what you earn and decide how much work you put in... All this will end since you'll essentially be joining 'the rat race' but at a much larger scale...
Isn't that what we're running from??
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AidanKay 15 years ago

There comes a certain point where you make so much money, you couldn't legitimately get rid of it all. Honestly, once you have your house(s), your car(s) and all that, the only reason to continue doing what you're doing is the love. If you love what you're doing, I'd keep at it.

Me personally, I'd keep at what you're doing. It seems it's something you have some emotion for, plus, the freedom is worth much more then money. How much money do you think your spare time is worth? =].

Yet again, I'd just keep at what you're doing, as TonyScott said - politely decline and be done with it.
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linkedinlincoln 15 years ago

Seems like your mind is already made up. To me, your first post read like someone who had decided what he wanted and was simply talking himself into letting go of what he "thought" he wanted. I could be wrong.

I made a similar decision once. Except it went the other way. I walked away from a six figure salary and a partnership in a small cap industrial services company to do this. I wouldn't even look back now. And I don't think you will either.

Best of luck in your new venture.

-Kathy
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Steve Steinitz 15 years ago

One thing. You don't need to agree to his terms. He's just made the first offer. Come back with what you want. Off the top of my head: keep your site, $50k retainer, competitive salary, independent auditors paid for by company, own 51% (rather than 40%) of company, advantageous bail-out conditions... Outrageous? Maybe, but so is asking a successful businessman (yourself) to drop everything and make someone else rich. I know that's not an accurate statement of the scenario but perhaps it provokes some thought.

Also, get professional advice about the deal. Don't let this gentleman snow you. Have a team in your corner.
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john2k

15 years ago

Originally Posted by Daniel Molano

However, there is a catch. A big one.

I would have to drop my current operation, and surrender all assets to the new company. Including my sites, one of which is valued at around $1,000,000 USD. Everything would be absorbed.

Does the tycoon want to absorb your assets simply in order to ensure that you are 100% focused on the new business?

If that's the case, maybe you can simply cash out of your current business before entering the new one. That might be another option the tycoon is willing to consider, if his goal is to have your effort focused.

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zapseo 15 years ago

Daniel -- yah, it could be a huge opportunity alright -- a huge opportunity to get screwed.

I didn't read anything, I just read the part about giving him control (ownership?) over all your business assets.

Think of the DOWNSIDE not just the UPSIDE.

What if, after that, he found a way to get you out of the company. (Hey, if Steve Jobs got kicked out of Apple, anyone can get kicked out of a company they started if they lose control.)

Oh, and while you're at it, go find a copy of "the Man With No Name" -- about how Famous Amos can't use his name anymore.

Live JoyFully!

Judy
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Daniel Molano 15 years ago

Every single response so far has made perfect sense.

I do like the idea, but if it's going to happen it's going to be under my own terms.

I'm not dropping my current operation, nor will I allow my assets to get absorbed.

Thanks everyone for helping me clear my mind. I think I will be going for it if he agrees to my terms.
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iw433 15 years ago

I stopped reading when I got to; "I would have to drop my current operation, and surrender all assets to the new company. Including my sites, one of which is valued at around $1,000,000 USD. Everything would be absorbed."

NO WAY!!!!!!!
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MemberWing 15 years ago

I would keep your sites and all your current operations independent and then consider joining this *whatever new* company.
If he will insist on you giving up your hard earned and beloved personal enterprises - it is a red flag.
Big one.

Gleb
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- Jeremy Kelsall 15 years ago
  
  Dumb question...
  
  If you are selling coaching packages at 50K a piece, why would you even consider jumping back into the "corporate world"?
  
  You have sites worth a million dollars
  Sold out of coaching packages of 10K, 25K, and 50K
  Have sites that are making you over 100K a month
  
  Why would you even consider the offer?
  
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Marian Berghes 15 years ago

I think it depends on what you want...ill give you me as an example

I've seen IM'ers say "Making $500.000 a year is cool, but making X million is even cooler"...I couldn't care less about the millions if that implies that I have get on a tight 9-5 schedule or something and have a bunch of employees and deal with lawyers and sht...I don't want that.

Personally, I didn't get into IM to work 9-5 all my life, I didn't get into IM to have 20 employees and a big ass company etc...

So it all comes down to what makes you happy and what are your goals for the future...me...I just want a "system driven" company mostly that will make me between 3-5 million dollars per year...a company that allows me, and I quote Moffat on this "I don't want a 2 week vacation a year...I want a 2 month vacation a year" or around that.

So its all up to you...with this company you could make more money given the fact that you have access to those contacts...on the other side...the margins are lower and you would be on a "strict" schedule.
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IMChick

15 years ago

Hi, Daniel. My opinion is the same as the others on this thread.

As soon as I heard this story, I immediately thought of the movie 'the devil's advocate', with Al Pacino/Devil reeling them in and owning their souls because they fell for one of the 7 deadly sins. This deal sounds too good to be true to me, and is structured for the phantom % (carrot) is meant to appeal to your greed. Remember that nothing from nothing leaves nothing.

The main question is "why?" and you're the only one who can answer that. Money? Power? a Challenge? What is your actual motivation here, and what is the reason that you are even entertaining this offer.

The 'deal' is in favor of the guy making the offer, and is structured in such a way that after you give up your assets, you have a %age of nothing and someone else is calling the shots. I don't understand how this can appeal to you. And apparently, the very thing that attracted this guy to you and enticed him to make an offer is the one thing he plans to do away with as soon as you sign up. Autonomy and independence and financial stability for just a few. The 'deal' doesn't sound right to me.

I would respectfully decline and remain close business associates with this guy. Ask him if he sees you in a lesser role as a well-compensated consultant (read, non-employee chained to his timetable and desk).

I read in between the lines of your replies to this thread that you are leaning toward re-re-negotiating and making yourself a favorable deal if the terms are better. I hope that's not true, because given the facts here, it seems that you are risking it all for a company that is not ever going to be yours.

Why?

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Daniel Molano

15 years ago

Originally Posted by Jeremy Kelsall

Dumb question...

If you are selling coaching packages at 50K a piece, why would you even consider jumping back into the "corporate world"?

You have sites worth a million dollars
Sold out of coaching packages of 10K, 25K, and 50K
Have sites that are making you over 100K a month

Why would you even consider the offer?

The answer is potential.

With corporate reach I could be selling 100x what I'm currently selling, have 20 projects running at once, and my budget would be way much higher.

Not to mention that I would have access to the real big guns.

Amazing in house team, free office, fixed schedule. It's just more productive.

Instead of doing consulting, I would actually be providing the entire internet marketing service (including SEO rankings for any keyword whatsoever) and command much higher fees.

To be perfectly honest, I'm sort of getting tired of working "alone" and doing almost everything myself.

Outsourcing might be cheaper, but it takes more work and it's less effective than having an actual staff of professionals right there with you.

And you're exaggerating things, I wish what you said was true, but it's not.

I don't have sites worth millions of dollars, it's only one site that I was offered $900,000 for.

My sites are definitely not making $100k per month. Per year at most.

And the coaching packages is not like I sell 10 of those every month. The 50k one I've sold 2 in an entire year and same for the 25k one.

I haven't even sold one of the 10k ones, that's the 2010 price. They sold out for 5k and 7.5k.

We just can't handle more clients this year which is why it's sold out. That doesn't mean I've sold hundreds.

There you go, another reason. With the corporate budget I would have no limit to how many I can sell.

The potential is just huge.

Basically, I can start doing today what my current business operation could only be capable of doing 10 years from now at its current rate of growth.

Originally Posted by IMChick

Hi, Daniel. My opinion is the same as the others on this thread.

...

I read in between the lines of your replies to this thread that you are leaning toward re-re-negotiating and making yourself a favorable deal if the terms are better. I hope that's not true, because given the facts here, it seems that you are risking it all for a company that is not ever going to be yours.

Why?

I think I pretty much answered why in Jeremy's reply above.

But I would be owning the company.

I would have 40%, same as my partner. Both of us being the majority. It would be 40-40-10-10.

But you're right about sacrificing it all.

Under my terms I would keep all my assets and be allowed to continue with my operation independently. I would have a flexible executive work schedule as Sean suggested, and I would definitely be calling the shots.

After all I would be running it with no one above me (except the board of which I would be a part of).

So if he agrees to it fine, if not then it won't happen.

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JayXtreme 15 years ago

Daniel..

You should politely decline his offer. Seriously.. The offer seems weak based on what you have told us..

You're in a position to do much bigger things than what he is "offering"..

Take it from someone who inherited (I gave up nothing in return, just received 45% on my 18th Birthday) a stake in my father's company... the deal on the table seemed glorious at the time, but I ended up working night and day to rid myself of that chain around my neck.

The money is no substitute for your personal feelings and happiness.

I make more money now, and probably have more trouble in business than I did running my fathers company..

But I enjoy it more...

Why?

Because it's MY choice

Peace

Jay
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Amanda Craven 15 years ago

The answer lies in the speech you cite in your title:

To sleep: perchance to dream: ay, there's the rub;
For in that sleep of death what dreams may come
When we have shuffled off this mortal coil,
Must give us pause: there's the respect
That makes calamity of so long life;
For who would bear the whips and scorns of time,
The oppressor's wrong, the proud man's contumely,
The pangs of despised love, the law's delay,
The insolence of office and the spurns
That patient merit of the unworthy takes,
When he himself might his quietus make
With a bare bodkin? who would fardels bear,
To grunt and sweat under a weary life,
But that the dread of something after death,
The undiscover'd country from whose bourn
No traveller returns, puzzles the will
And makes us rather bear those ills we have
Than fly to others that we know not of?
Thus conscience does make cowards of us all;

In other words be brave and live your dreams...
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garwil200 15 years ago

Daniel,
I have been in business in Atlanta for 44 years. I have been taken a couple times myself at what seemed too good to be true. There are no garantees in life. The biggest failure is to do nothing. It sounds to me like you have already decided. We can all give our opinions, and I do think that all the posts make good sense to me.
The only thing I can add is, use an experienced corporate lawyer to work out the details. tell him your terms you want and let him dot all the I's and cross all the T's.
I assume you have already made that decision and have good counsel.

I hope for your sake that it is legitimate, because your desire came through loud and clear in your posts. I do have one more note of caution. Remember Bernie Madoff! The man fooled and embezzled some of the top businesses and investors in the world, even governments. So don't hurry, do your due diligence, make sure you have a golden parachute, and if you can do that, then GO FOR IT. You have my best wishes. Stay in touch with us Warriors, let us know how it goes, and we will cheer you on.
Jerry Garner
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Marty S

15 years ago

Tough dilemma, but I would want to see the secretaries first.

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rapidscc

15 years ago

Originally Posted by Marty S

Tough dilemma, but I would want to see the secretaries first.

Marty gave it a proper perspective alright

LOL I almost fell out of my chair..everybody so serious and then this one..

Daniel,

You have come a long way. You have a good head between those shoulders so I trust you would do the right thing.

I can see you are looking at this one from the perspective of potential. What could be. Only you can answer that..

I know you've already got a lot to think about but still I would like to offer another perspective on this..

Will you be able to provide MORE VALUE with this one? Would you be able to HELP MORE PEOPLE and CHANGE MORE LIVES with this opportunity?

I won't ask if this opportunity will "MAKE YOU THE BEST THAT YOU CAN BE" because RIGHT HERE RIGHT NOW..You've already accomplished that one..

To Your Success!

Omar

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Daniel Molano

15 years ago

Originally Posted by rapidscc

Marty gave it a proper perspective alright

LOL I almost fell out of my chair..everybody so serious and then this one..

Daniel,

You have come a long way. You have a good head between those shoulders so I trust you would do the right thing.

...

I won't ask if this opportunity will "MAKE YOU THE BEST THAT YOU CAN BE" because RIGHT HERE RIGHT NOW..You've already accomplished that one..

To Your Success!

Omar

Hey Omar,

Thanks a lot for the words.

It's also because of the opportunity itself.

A chance to get out there and meet extremely succesful people, outside of the online world.

I will get to work side by side with a guy that has built a $50,000,000 USD offline empire. He owns and runs it.

Work with an in house team of remarkable professionals, rather than outsourcing everything. (To be honest, it was getting a bit lonely here).

Not to mention that I can advance my business further. I can start doing things that I could only have done 10 years from now with my current operation.

Anyway, I have decided. If my terms are not agreed upon then I will politely decline as several Warriors have suggested.

Thanks again everyone,

Dan Molano

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Local Corporate Tycoon Offers Partnership... To Be Or Not To Be?

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