Im new to be an entrepreneur. Im in my late 20s. I was working 60hrs/week and then ACA got upheld by the SCOTUS and I realized I would never be wealthy as long as I am working for someone.
On a related note, I started a business that is seeking a patent, but thats not what this thread is about. I was approached by a college friend about a business idea. It is not a revolutionary (B2B) business, but it undercut competitors by 50% while providing more services. He works FT and he did the new business as a hobby and got like 3 clients (Mom/Pops). I immediately saw the potential for this business, but he had some misconceptions. He asked me to join him and do this FT to help get the business off the ground, figure out a business model, a pitch, find out what works and what does not, etc. while he gives me support. He told me "if the business takes off we will discuss making you co-founder." So I always expected to have part equity because I was building this company for him, while he works FT.
Four months later I have a supermajority of the clients, like 20:10, we have changed prices, and services based upon my work and insight. Now I get 65% commission on sales and that is the only compensation I have received. For the most part I have taken a loss over these 4 months because his price structure ensured it. More or less, I have been working for free, or at a loss. I open up the door to soliciting bigger entities, now that we have a few dozen clients and excellent quantifiable results.
Now a friend of a friend talked to him and is setting him up with a client that is worth 250 clients. At first I was elated because I knew what it meant for the business. Then he says my job would be salaried working for 125 (half) clients. But he has to win these clients first, so we are discussing the pitch and his wife asks how do we introduce Mr.E, and he says "idk" I say "how about co-founder?". Resoundingly, they both say "no."
I talked to him afterwards and he pretty much told me, he wont give up equity unless it was someone who was a game-changer for his business and even then it would only be 30%. Me if I work for him for 2 years and get an MBA then I may get 10-15%... (another promise)
The problem is, he wants to sell the business after 5 years. And if Im taking half the load for 0% or even a mythical 15% Im having a hard time staying put. I didnt get into this do to sales.
If I do stay, the only words he will hear from me are "sale" or "no sale" because apparently I have been giving him everything else for free.
On a related note, I started a business that is seeking a patent, but thats not what this thread is about. I was approached by a college friend about a business idea. It is not a revolutionary (B2B) business, but it undercut competitors by 50% while providing more services. He works FT and he did the new business as a hobby and got like 3 clients (Mom/Pops). I immediately saw the potential for this business, but he had some misconceptions. He asked me to join him and do this FT to help get the business off the ground, figure out a business model, a pitch, find out what works and what does not, etc. while he gives me support. He told me "if the business takes off we will discuss making you co-founder." So I always expected to have part equity because I was building this company for him, while he works FT.
Four months later I have a supermajority of the clients, like 20:10, we have changed prices, and services based upon my work and insight. Now I get 65% commission on sales and that is the only compensation I have received. For the most part I have taken a loss over these 4 months because his price structure ensured it. More or less, I have been working for free, or at a loss. I open up the door to soliciting bigger entities, now that we have a few dozen clients and excellent quantifiable results.
Now a friend of a friend talked to him and is setting him up with a client that is worth 250 clients. At first I was elated because I knew what it meant for the business. Then he says my job would be salaried working for 125 (half) clients. But he has to win these clients first, so we are discussing the pitch and his wife asks how do we introduce Mr.E, and he says "idk" I say "how about co-founder?". Resoundingly, they both say "no."
I talked to him afterwards and he pretty much told me, he wont give up equity unless it was someone who was a game-changer for his business and even then it would only be 30%. Me if I work for him for 2 years and get an MBA then I may get 10-15%... (another promise)
The problem is, he wants to sell the business after 5 years. And if Im taking half the load for 0% or even a mythical 15% Im having a hard time staying put. I didnt get into this do to sales.
If I do stay, the only words he will hear from me are "sale" or "no sale" because apparently I have been giving him everything else for free.
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