Hey all,
This is a business / friend question. I am starting a magazine and have a friend who I think is excellent at building relationships who wants to be involved. He is very lacking in the social media area, but tells me he can bring some money to the table and also wants to help with content and setting up events too. He really has no idea about the magazine content. He stepped forward and said he would put in a graduating scale of up to 45 grand into the business in the next 9 months (I couldn't get a clear idea on what that meant, it sounded like as needed money promised up to that point, but to me that sounds like me begging for money as things go along and giving him an easy out of things aren't working). and would be a part of advertising growth, and social media outreach.
He wanted 40% of the business for this and promised I could buy back all the shares within 3 years for 14% of value if I wanted (I think he offered this to lessen potential risk for me if not working.
He later countered without me putting out a pefcentage with 25%.
For thos experienced with these matters, what are your thoughts? I could probably grow the business faster with capitol and with working with him, but I am concerned that I would be giving away the farm and giving my friend a free ride if things start going very well. He is very good with people but doesn't always make good decisions and that graduated deal makes me hesitate. I would prefer to sell shares for a value upfront so I know what I can budget.
Any help you can provide?
This is a business / friend question. I am starting a magazine and have a friend who I think is excellent at building relationships who wants to be involved. He is very lacking in the social media area, but tells me he can bring some money to the table and also wants to help with content and setting up events too. He really has no idea about the magazine content. He stepped forward and said he would put in a graduating scale of up to 45 grand into the business in the next 9 months (I couldn't get a clear idea on what that meant, it sounded like as needed money promised up to that point, but to me that sounds like me begging for money as things go along and giving him an easy out of things aren't working). and would be a part of advertising growth, and social media outreach.
He wanted 40% of the business for this and promised I could buy back all the shares within 3 years for 14% of value if I wanted (I think he offered this to lessen potential risk for me if not working.
He later countered without me putting out a pefcentage with 25%.
For thos experienced with these matters, what are your thoughts? I could probably grow the business faster with capitol and with working with him, but I am concerned that I would be giving away the farm and giving my friend a free ride if things start going very well. He is very good with people but doesn't always make good decisions and that graduated deal makes me hesitate. I would prefer to sell shares for a value upfront so I know what I can budget.
Any help you can provide?
