I have a friend who is making an app and he has not paid the developers a dime yet as he is creating the app and has a few clients as pilots for the app that will start paying for him soon. He has a unique situation in which he worked with the developer first in the Philippines office of a company we all worked together at. Since they had this previous relationship, there is a large trust there and everyone is happy with the arrangement. Once they start making money, he will provide them equity and they will make money then.
Does anyone have experience in setting up a company providing equity to the developers? I am starting to build an app and this guy working with my friend has friends in the Philippines that want to develop for us and setup a full development team including QA and testing.
Having my friend's team know they have a stake in the success in the company really is motivating them to think outside the box and come up with their own great ideas and implement them into the app with the ok from my friend here in the US that is managing the project and founded the company.
I would like to setup a similar structure to provide the developers managing a team a vested interest in the success of the company. They are requesting cash up front and then business equity if the app is a success. My friend was talking to another entrepreneur who said the best way to set up the structure is to setup an initial LLC for the business and then build into there an agreement where you provide them a percentage of the revenue or whatever. We are in the US here and they are in the Philippines, so this causes some issues to come up.
Does anyone have any knowledge of a structure like this? If so, what would be the best way to setup this agreement with the development team?
Does anyone have experience in setting up a company providing equity to the developers? I am starting to build an app and this guy working with my friend has friends in the Philippines that want to develop for us and setup a full development team including QA and testing.
Having my friend's team know they have a stake in the success in the company really is motivating them to think outside the box and come up with their own great ideas and implement them into the app with the ok from my friend here in the US that is managing the project and founded the company.
I would like to setup a similar structure to provide the developers managing a team a vested interest in the success of the company. They are requesting cash up front and then business equity if the app is a success. My friend was talking to another entrepreneur who said the best way to set up the structure is to setup an initial LLC for the business and then build into there an agreement where you provide them a percentage of the revenue or whatever. We are in the US here and they are in the Philippines, so this causes some issues to come up.
Does anyone have any knowledge of a structure like this? If so, what would be the best way to setup this agreement with the development team?
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