working for shares - advice needed

by pmooreimages 14 replies
Hi all,

I have just joined up with a new company as the marketing manager. The company looks as though it could become fairly large within its niche and already has signed agreements from company's such as Nike offering sponsorships and advertising deals when a small number of paid accounts sign up.

We currently have 3k users and several well know personality's within the niche signing up and providing useful content.

ANYWAY...

as we are keeping things on a tight budget until the full realse we are all working for shares (5 key people)..problem is i have no idea about shares or what is a fair offer..

below is my initial share offer, if you can give any suggestions on things I should ask or check out please I NEED to hear them.

pual has worked pretty hard for 6 months so we made an agreement that he got 10.000 in shares every month to the valuation of 2m . And he will get provision in shares if a sponsor sign with us..


We could have the same but that you will get provision in shares depending on active users. Its just a first thought, we can discuss this in more detail in the next meeting.
Thanks for any help!
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  • Profile picture of the author seasoned
    By SHARES, do you mean ownership? If so, the value is the potential of the company multiplied by your proportion of the shares. if the company goes bankrupt, your shares will be worth nothing.

    Steve
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    • Profile picture of the author pmooreimages
      yes i mean shares as in partial ownership. SO I just need to ask how many shares they are issuing in total to get a better idea of my % of the company?
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      • Profile picture of the author seasoned
        Originally Posted by pmooreimages View Post

        yes i mean shares as in partial ownership. SO I just need to ask how many shares they are issuing in total to get a better idea of my % of the company?
        YES, but they COULD offer more shares. They SHOULD have splits, but you can never be sure. If they had splits, the stock would be worth less, but you would have more shares.

        Steve
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  • Profile picture of the author yukon
    My question is, how many hours is OP working per month to get 10K shares over tha 6 month period.

    So, how many shares per worked hour?

    Is the amount of shares per hour worth it?
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    • Profile picture of the author pmooreimages
      it is 10k share per month + performance bonuses, I will be working on the project between 15-30 hours a week to receive that many. The company currently has 400k in cash though the site is going to cost us 50k to build.

      Im guessing the first question I should ask then is not how many shares are being issued but what % of the company 10k shares is?

      I do plan on discussing this with a friend of mine that is an investment banker, however he is away for a couple of weeks so i am trying to get a better idea of what i need to ask encase the subject should arise before he returns.
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    • Profile picture of the author seasoned
      Originally Posted by yukon View Post

      My question is, how many hours is OP working per month to get 10K shares over tha 6 month period.

      So, how many shares per worked hour?

      Is the amount of shares per hour worth it?
      Let's see. In some areas at least, such as nevada, the base number of shares is 1500, they charge for more. Based on YOUR method of payment, h would OWN the company in less than 37 weeks, at 8 hours a day with one share per hour. It generally DOESN'T work that way.

      Steve
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      • Profile picture of the author pmooreimages
        Bump bump bump!
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        • Profile picture of the author JDArchitecture
          You don't need to bump this thread, you need to see an attorney!

          While you're at it, go watch The Social Network and pay attention to what happens to Eduardo and his shares.
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          • Profile picture of the author pmooreimages
            at the moment its still early stages so seeing an attorney without a fixed offer is pointless.

            I was hopping someone here may have an idea of some questions i should be asking before It gets any closer.
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            • Profile picture of the author seasoned
              Originally Posted by pmooreimages View Post

              at the moment its still early stages so seeing an attorney without a fixed offer is pointless.

              I was hopping someone here may have an idea of some questions i should be asking before It gets any closer.
              1. OK, IS it a corporation or LLP, or some such LEGAL entity? Many lawyers couldn't do this any better than you.
              2. HOW are the able to increase shares, and how will that affect YOU? AGAIN, many lawyers may not be better than you.
              3. WHAT is the value of the company, real and potential? AGAIN, not a LAWYER deal. In fact you might want to know if a third party audited it.
              4. WHAT is the competition like? If they have NONE, WHY? If they have some, what is THEIR USP!
              5. When and how are you to be paid?
              6. When and how can you redeem?
              7. How will the value be determined?


              Seriously, LOOK! A lawyer will HAVE TROUBLE with 1 and 2, and NOT be able to determine 3,4,5,6, or 7.

              WHY would they have trouble, etc? It depends on the TYPE of organization, WHERE it was setup, and WHICH OPTION was taken. You go to a lawyer to MAYBE help getting some of the info, validating contracts, writing contracts, and ENFORCING contracts.

              The US stock exchanges, for example, are PUBLIC stock exchanges! They FORBID sales of stocks unless they were or are approved by the SEC, and have enough shares. ZZZZZbest, for example, was listed on a technicality, since it WAS listed earlier. Minkow bought a SHELL company, and basically filled it up with HIS company.

              SO, if you have a small corporation and issue stock, you can be freeer as to how it is valued, etc... Of course, in a voting/ownership conflict even a few shares can be valuable. Even with a company like apple, there may be limits as to when you can sell, etc... if they give you warrants, or something similar,or if they give you a substantial amount.

              Steve
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              • Profile picture of the author pmooreimages
                thank you seasoned. you have given me a couple of good questions for me to ask there. Most of the questions regarding the actual company I already know and do feel quite confident in there plan especially after seeing who some of the people involved or offering sponsorships are.

                I am just looking into all of the possible ways i can protect myself from getting screwed or shares being too heavily diluted.

                - I think the first questions I need to ask is how many shares are being issued and what % of the company that represents

                - When and how can you redeem?

                - HOW are they able to increase shares, and how will that affect YOU?

                after that I guess I cant do much else until I read the contract.

                Thanks again for all the help, any other comments are very much welcome.
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  • Profile picture of the author Joe Mobley
    Go see an attorney! Ahh, now!

    To many unanswered questions here. Probably even more unasked questions that need to be addressed.

    Joe Mobley


    Originally Posted by pmooreimages View Post

    Hi all,

    I have just joined up with a new company as the marketing manager. The company looks as though it could become fairly large within its niche and already has signed agreements from company's such as Nike offering sponsorships and advertising deals when a small number of paid accounts sign up.

    We currently have 3k users and several well know personality's within the niche signing up and providing useful content.

    ANYWAY...

    as we are keeping things on a tight budget until the full realse we are all working for shares (5 key people)..problem is i have no idea about shares or what is a fair offer..

    below is my initial share offer, if you can give any suggestions on things I should ask or check out please I NEED to hear them.

    Thanks for any help!
    Signature

    .

    Follow Me on Twitter: @daVinciJoe
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  • Profile picture of the author waterotter
    I'd be curious to know if they "the company" has taken out a life insurance policy on you.
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    • Profile picture of the author seasoned
      Originally Posted by waterotter View Post

      I'd be curious to know if they "the company" has taken out a life insurance policy on you.
      Why is that? He hasn't even accepted, but the company wouldn't stop if he died. Still, all this does is give them a little bit of an interest.

      Steve
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