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Hi there, I have an angel investor for the startup, we want to register the company officially, what is the right/secure way to make sure every party gets what they deserve? to explain situation on the ground and please and bare with me here, the company will not make profit any time soon, and the angel seeks to have a VC come and take over soon,so the angel would get out of financial covering of company,and would have a share or profits from company at that point. we want to register the company, in Jordan, he wants to be %100 owner of company and to write a contract "which my lawyer says that it is legal",contract stating that if/when the company makes profit or is sold/acquired by VC only then will I get my share from the company, but right now I am only treated as an employee. I am not sure what the consequences are on me by not being part owner of company,does it put me in weak position or is it all the same as I have a secure share in the end? the whole startup concept and most if not all the workload is on me, but he is the one with the money and I have non, I know each case is different, but what is considered "common" between angel investors? thanks! |
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Normally Angels take up to 15% not more. In the middle east they always want at least 60%. My Opinion? Find someone else. Because such a person doesn't consider your work, and has no clue about transactions, so how can he help your company except form money? |
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I would say that's very uncommon deal structure and very unfriendly for entrepreneurs ... With angel investors either try to push for a convertible note (which was covered in a previous question on YallaStartup) or just take some seed money for no more then 20%. You might need to do another round in the future and you might want to even pivot and adapt your business plan both of which are kind of impossible with the proposed deal structure. Without knowing much about the angel himself, I would say this is a pretty bad deal structure ... |
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Agree with most folks. This is just wrong in many ways. This structure is just not friendly and makes you unfundable by any sophisticated investor in the future. Another "more complicated" option that is done by investors in the US is to give the investor "preferred stock" while founders get "common stock". This offers the investor "stronger" voting powers and controls order of payment on an exit. Using this model, the investor can own less than majority while retaining control over the business. |
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If you haven't signed the deal yet, DON'T! Even if the contract is legal, that doesn't mean it protects you or that it is fair. Get a different lawyer and a different Angel/Investor. |
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According to me don’t just go for any such contract which will put the sole responsibility of work and its results on you. Any business is a team work and support from all sources should be equal for better results. Taking sole responsibility will be a great risk in this. If you have not signed the deal, it won’t be wise to go for it even if it is legal. Being a legal contract only won’t give you the protection needed for your progress in business. Many other factors will have great impact on the gains. Marks Development Officer Paycor |
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I am the founder of a fitness service that is dynamic and innovative and unlike anything currently available in the market. I am looking for a single investor that can help boost my company to its next level. I downloaded many reviews on the issue from bytesland web search , but didn't find what I needed. The site is close to being completely functional, they are currently testing it on different platforms for compatability. We have our trademark applications in and our looking to get this launched soon. Frankly, our competitors do not have an advantage and the profitability is off the charts. Fitness is a billion dollar industry and we are looking to take advantage as quickly as possible by way of the web. If you have serious investor potential, I would love to hear from you. I can provide my Mission statement, screenshots of the site, as well as company background. |
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I work within the fitness industry and have been in a similar situation. It's a good idea to draft up a proper legal contract between the parties involved. I had to do this with my company called idol white and they were several partners from day one. |
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I think it's amazing that you mangaed to find an angel investor to start with in this climate, it's something that I have really wanted to do with my big boys toy shop, I sell items like the lego city harbour etc. My only advice would be to make sure that you have everything in a water tight legal document and that you get your lawyer to go over every inch for you. Good luck and I hope your business is a massive success. |
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different platforms for compatability. We have our trademark applications in and our looking to get this launched soon. Frankly, our competitors do not have an advantage and the profitability is off the charts. Fitness is a billion dollar industry a s in and our looking to get this launched soon. Frankly, our competitors do not have an advantage and the profitabilit personal trainer pa |
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they are currently testing it on different platforms for compatability. We have our trademark applications in and our looking to get this launched soon. Frankly, our competitors do not have an advantage and the profitability is off the charts. Fitness is a billion dollar industry and we are looking to take advantage as quickly as possible by way of the web. If you have serious investor potential, I would love to hear from you. I can provide my Mission statement, video boss |
