Posts by vividheron6

That’s exactly what I was getting at. Some kind of partnership agreement where he gets a cut of the profits.

But let’s be real, I'm expecting him to ask for equity in the company. That's where the negotiating and the back-and-forth really starts.

Thanks, you two!

Of course I’m looking at this through his lens—basically, how can he make money? Maybe he takes a cut of the project profits. We'd probably need a solid contract that lets me tap into his firm's capital and resources as long as he holds an equity stake. It would all come down to calculating my usage of those assets against his return on investment. But honestly, I want to remain the sole owner.

The core of my hesitation is that I’m playing the long game. I want to eventually reach a point where I'm completely independent of him. I don't have anything against the guy, but let's be real: a split is inevitable sooner or later because the gap between our capacities is just going to widen. As time goes on, my company will become a more attractive, easy investment for him, while he starts feeling more like a burden to me (given his personality and his age). If I manage to build a powerhouse company by then, I don't want to be stuck paying out a massive settlement to a partner (just look at what happened to my friend I mentioned earlier).

I see the whole setup as a launchpad for my startup and a decent mid-term investment for him, rather than the start of some eternal synergy or lifelong partnership.

By the way, I definitely recommend reading:
Richard Koch: 80/20 Principle
It touches on exactly these kinds of things.

Jacob Long said:I’d say you need to nail down ownership stakes—aim for at least 51% or 55% if you want control. The split depends on how you guys play it, but profit sharing should always follow those ownership percentages.

I don't know the ins and outs of this perfectly, but from what I've gathered, there isn't really a way to split profits unless you both actually own the company.

If you're planning on giving him a cut per project, you really ought to sign a separate contract for every single one. If you don't want to go that route, he won't have any claim to the money—and trust me, he's not stupid.

Whether you're asking for too much is subjective, really. What matters is what's realistic. Ownership is based on what everyone brings to the table. From what I can tell, your contribution is just yourself and the cash. That team you're building? They aren't "contributions"—they're employees getting a paycheck. Your only real leverage is negotiating with the boss to snag a bigger percentage.

Contributions can be cash, assets, or rights, so basically

My employer is willing to provide the office space, all the equipment, and even cover payroll for six months if I decide to hire a team right out of the gate.

Based on that, he's contributing the space—but you need to figure out if he's just letting the new company use it or if the company will actually own it. Either way, you can put a dollar value on it. If it's just usage rights, just look at the market rental rate for that period and there's your number. Same goes for funding payroll and the equipment. Once you see his total value, you'll know exactly how much capital you need to inject to hit that 51% or 55% mark. You can't really put a price tag on yourself or the people you hire...

Who acts as CEO is up to you guys, but if things stall, the person with the majority stake makes the final call. If you want the power to make decisions, make sure you grab that majority share.

You keep saying intellectual capital is the whole game here, but is it really that simple? You'd start the company alone if it were, but nothing is ever quite black and white, right?

My boss and I are starting a business together, but his idea was to pay my portion of the initial capital for me. People like that are rare, though—and I won't be walking away with the majority stake.

Also, make sure the operating agreement includes a clause stating that if a partner wants out, they have to offer their shares to you first.

And honestly, just do your homework—talk to a lawyer and read the actual laws.

My employer is just letting me use the office space.

What's his role? He provides the workspace and we tackle certain projects together. That's why I brought up the idea of him taking a percentage of the profit per project.

If I absolutely have to give up equity, I’d want it to be around 30%, because:

If the deal falls through, I can just start my own LLC and do the exact same thing. I might have less work at first and fewer resources, but I'll be independent.

On the other hand, he’d lose his best talent and the steady income he gets from my firm. For him, it's basically an investment.

Again, this is all professional services. We aren't talking about heavy machinery or expensive equipment or anything like that.

Here is my situation:

I’m currently employed at a company, and I'm looking to launch my own business in "partnership" with my current employer. My new venture would basically complement what they already do.
My boss is actually willing to provide office space, equipment, and might even cover payroll for the first six months if I decide to hire a small team right away.
I'm fine with covering the initial startup costs and seed capital myself.

The tricky part is how to structure this partnership fairly, without them being able to block me if I eventually want to go fully independent.

Should we handle this through ownership stakes in an operating agreement? Like 50:50? Or maybe 51:49 in my favor?

Or should I be the 100% owner, but we write into the contract that they get a cut of the profits? If so, how much?

How do people usually handle these kinds of setups?

Ideally, I’d love to be the sole director of this new LLC and avoid giving them any actual equity. I'd rather just pay them a percentage of the profits from each project instead.

Am I asking for too much?
I don't think so. The nature of the work is about 95% intellectual capital (which is me) and only 5% other resources.

I have a friend whose boss helped him start a company seven years ago by providing some initial contracts and an office. After that, the support dried up. The boss held 51% and my friend had 49%. Through pure grit and sacrifice, my friend turned that company into one of the top players in the country for their niche. He recently decided to buy out his majority partner to go solo, but he had to take out a massive loan and put up his personal assets as collateral. Now he's finally independent, but he's staring down a huge debt. It feels like he had to build the company twice.

Looking for suggestions. 😕 😕 😕

Thanks!