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  1. #1
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    Looking for a webdeveloper to a great business opportunity!

    Hey,

    I am looking for a business partner with good business and webdevelopment skills and I will offer you the opportunity to build something of a great idea in an untapped market. Which can become very successful if executed right..
    It is an internet business with few competitors in the market and a lot of competitors that seem to have crappy websites from the 1990s. There are 2 or 3 competitors that are REALLY successful, multi-billion dollar companies, we will not compete with these in the beginning and focus on other markets with the "bad" competitors first to gain momentum, but still I have found out that these companies have a lot of unhappy customers where we could compete with them in the future.

    Low competition on HIGHLY searched keywords, millions of searches.. Both on SEO and Adwords.
    It is not the most complex website that needs to be built, but it is a little challenge and it needs to be really good design and functionality as well as SEO. One of the USP's will be to have GREAT looking design and very simple and easy navigated site with good functionality. So this is important.

    You will get a equity stake in the company and you do not need any money upfront and that are as hungry and motivated as I am to build a successful company that could scale a lot.

    If you are interested please send me your portfolio!

    Best,
    Last edited by Netprofit; 03-27-2011 at 08:41 PM.

  • #2
    UE Antagonizer Fumigator's Avatar
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    You may want to consider hiring a freelancer to build your website for you and then you get to keep all the equity. Just a thought...

  • #3
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    Yes I see where you are coming from.. But the thing is that this is one of my first ventures, started as an entrepreneur a year ago and I'm 19 now..
    So I really don't have a lot of money to put into this at the moment as I am also working on a another startup at the moment some.

    And I think it would be best to have someone constantly adopting and changing throughout the customer development. When we get feedback from users etc.

  • #4
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    Yes that's always the problem with a business concept, getting the resources to make the idea a reality. It's just interesting to me that you are willing to accept that a person who has web development abilities would also be the same person you would want to be a business partner with.

    I never hear about people asking printing shops to print a bunch of signs and fliers and business cards in return for equity in the business. Print shops will do that stuff, for $$. Interesting that web developers get a different treatment.

    p.s. As your partner I would worry that your efforts were split between two different projects.

  • #5
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    Hmm.. That's true, but the partner would have a minority share and I wouldn't do this with just anybody.

    That's a good question, but as I do not have so much obligations in this other startup and have the most delegated this hopefully won't be a problem. I also think it will be easy to systemize this new business and hire people pretty fast. Still I will work flat out of course to make it successful.

  • #6
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    I've advised my clients, for many years, on all sorts of business ventures - sweat-equity partnerships included.

    The simple fact is, when one (or several) partner(s) owns a majority share in the partnership, and another partner (or partners) owns a minority interest, the partner(s) with a minority interest is effectively an employee with none of the typical protections that come with being a bona fide employee, and the majority owner(s) is effectively the boss (read - real owner).

    The minority interest holder has no decision-making authority and must perform the services necessary to carry-out the "vision" of the majority interest holder. If, and only if, there is sufficient profit - over and above what the majority partner decides needs to be reinvested or held for future needs - will the minority partner see any "compensation" for his work.

    I've seen it happen, time and again.

    I wish you luck in finding a partner worth partnering with.
    John

  • #7
    UE Antagonizer Fumigator's Avatar
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    PappaJohn-- have you ever advised on a partnership where an agreement was made between the majority and minority partners to guarantee (based on promise of revenue) a minimum amount of compensation for work performed by the minority owner? The amount of compensation would have to be based on a percentage of revenue, of course.

    I think that's the only way I'd be willing to contribute my time and skillz to a partnership. First I'd have to be sold on the concept. Second I'd have to have built into the partnership agreement a percentage of revenue paid to me until a predetermined amount was reached. At that point I'd still have my minority equity, and I'd be paid. Pretty reasonable, considering the risk I'd be taking

  • #8
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    Fumigator - the problem with a guarantee of a percentage of revenue is that you are getting into a pretty touchy area with the IRS. There are few accepted cases of guaranteed payments to partners. If the IRS does not accept the reasoning, the guaranteed payments are considered wages, and since the partnership did not report them as wages, and pay the associated employment taxes, the partnership & the partner end up with a potentially sizable tax headache. Of course, your state would not be any too happy either as they likely want Unemployment Compensation taxes, etc on the wages.

    Since the guaranteed payments you are talking about would be in exchange for your skillz and effort, its pretty clear that they would be considered wages in exchange for work.

    I agree that it would be reasonable protection in your eyes (mine as well), but the problem is that the IRS will consider the guarantee to take away the risk (to some degree at least). Taking away the risk, takes away the partnership.

    To answer your question directly, yes I have advised one client on this matter and my advise was to stay away from it.

    It's certainly possible for a partnership to hire a partner, but the partnership has to be careful in doing so, ie: the services performed as an employee must be distinct from the services performed as a partner. In addition, the compensation and ownership interest must be reasonable considering the circumstances.

    One of the key aspects that tax agencies consider in partnerships, is that the partners accept a proportional share of the risk by taking their compensation as a percentage of net profit, not revenue.

    Of course, accepting a percentage of net profit eliminates the protection you seek, since the majority partner decides when to buy the big new car (and who drives it).

    Even if there is not majority interest holder, you could find yourself in a similar situation as a minority partner. For example, you partner with 4 other people each owning 20%. Seems fair, but if the other 4 are collaborating against you, you find your 20% up against their 80%.

    Even equal partnerships are potentially dangerous ventures, especially for those supplying the needed technical expertise (unless you hold the majority interest).
    John


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