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SS · May 9th, 2008

I cannot even tell you how appreciative I am for all your advise. A truly special thanks!

drummerstar you are right, my eyes are more open and awake from just have read your post. I have always been a cut throat in prior business dealing and this needs to be no different. I guess I was blinded by the fact that I bought into the idea, that I need them, more than they need me.

drummerstar · May 10th, 2008

No problem! Anytime. Glad your eyes have been opened. You will be just fine. Be encouraged and I'll see you at the TOP!

freebird1963 · May 10th, 2008

I don't get it really. I have owned companies. In the computer/ISP field tho.

As long as you get it all on paper and legal you relieve alot of headaches.
Have your monthly and yearly meeting to make sure everyone stays on the same page and airs any problems it should work.
Communication is the key.

You have a good chance to start were many haven't. 3 artists looking to run with ya out of the starting gate.
5% is nothing big to give up for a start up. If you had a established company already doing thousands or millions it be a totally different situation.
If you need someting up front for the 5% then maybe have them fork up so many designs up front as their stake in the company.

Then you get to sell till you recover costs. So if the product sells your own cost are zero.
As long as you don't go overboard on first runs you can control that cost to see if that design is going to sell.
Otherwise you pay for the art work, have it processed and hope it sells. So theres more capital out the door and still no dimes coming in.

Plus your not paying any salaries upfront.
Think any sales force is gonna work upfront w/o any pay ?

Then you split 50/50.
Well you've recovered your cost already.
Now its profit your splitting. Now are you splitting every design with all or just that artist. Hell if its just that artist whats the big deal ? He designed a great artwork and you sold it. TEAM WORK. TEAM SHARE.
I think the artist knowing hes getting his share makes them work more harder and better and faster.

Plus the company owns all copyrights (I'd make that part of the deal) so if some other company wanted to buy rights or lease the artwork you'd get 85% of it while they'd get 5%.

And as for giving up percent ownership for them doing something you can't doesn't mean its a bad idea. Cuz otherwise you will be paying for this work and thats startup capital out the door that may not bring in a dime. Many businesses startup with a money guy and a do it guy or guys.

I don't know. I don't think I'd have a issue if I thought in the long run it get the company going.

Good Luck in whatever you do.
Mark

SS · May 11th, 2008

Quote:

Originally Posted by freebird1963


	I don't get it really. 5% is nothing big to give up for a start up. Plus your not paying any salaries upfront. Think any sales force is gonna work upfront w/o any pay ? Then you split 50/50. Well you've recovered your cost already. Now its profit your splitting. Plus the company owns all copyrights (I'd make that part of the deal) so if some other company wanted to buy rights or lease the artwork you'd get 85% of it while they'd get 5%. And as for giving up percent ownership for them doing something you can't doesn't mean its a bad idea. Many businesses startup with a money guy and a do it guy or guys. Good Luck in whatever you do. Mark

Mark,

I am not trying to disrespect you when I say this but you might be right, you don't get it.

First off it is 10% not 5% of the company. Also, that would be a total of 30% of the company hence the fact that there are three artists. Just remember that 5% has to be something or is would be 0%. On top of that where did you read that they even agreed to give up the copyrights to their work? They didn't, which makes it a truly gross proposal, which I understood when right my original post. I was just looking for understanding to all the madness.

Secondly, who do you think the sales force is? Me! Who do you think the front and back office is? Me. Who is the money guy? Me. Bottom line is all these guys are doing is drawing. Not say I can do it and I not saying I don't appreciate great art. However, all the risk is me and most of the sweat equity is me. I dont want to come off as selfish but in the end I only get 70% of the company. What happens when we split the profits and I am reinvesting all my money back into the company to make it grow, while they are taking theirs and putting it in their back pockets? Who pays for the legal fee to draft this mess up? Who has to spend more time and money on the accounting month to month?

Lastly, I don't know about you but I never walked away from a first date and said I am going to marry this girl, never mind really marry her. Before I get into bed with someone, I think it would be best if we built a relationship. I have done a great amount of research since this post coupled with the feedback I have received thus far from I truly have a better sense of where I want to go with this.

I appreciate your devils advocate view point but I think I might have to listen to the masses.

SS

Susie · May 11th, 2008

The best kind of partner is NO partner. In all the business dealings of 60 accumulated years of mine and my husband's, I don't think I've EVER seen one work out well. And that includes family and friends, not even to mention strangers! And especially not 3 of 'em (at the same time). I agree with paying the artists for what you're using, either a one-time purchase amount or a royalty, whatever. There are THOUSANDS of artists out there. These aren't the only three in the world... You've already got one whiner onboard - why are you supposed to be the bandage for this guy's previous burns? He worked, he got paid, the end. If he's stupid, that's his fault.

Can you imagine the guy that came up with the Post-It note gets to own 10% of 3M for his great idea? Yeah, I'll get right on that!

You sound like a nice guy. But you know what, there are rumblings already; can you imagine where this is all going? That's right - hell and back.

drummerstar · May 12th, 2008

THANK YOU SUSIE!!
Someone else gets it! No partners! "These are my terms take it or leave it". There are tons of designers looking for work.

SS · May 12th, 2008

What is the best site to find an artist that will have certain style and contact information via phone? I like to have personal touch.

Susie and Drummerstar you guys truly are awsome for being blunt and honest. I respect people who just say it how it is.

Keep this in mind as you go though life. Always reflect, adjust, get back up, and never stop doing what you love. Successful people make habit of what unsuccessfully people don’t like doing i.e. long hours, calculated risk, change/feeling uncomfortable .

Be good, stay sweet!

SS

freebird1963 · May 12th, 2008

SS
No problem. If I knew everything I wouldn't have to get up every morning and go to work !

Just to clarify tho on your original post you wrote :

Equity Details:

Capital: 100% Mine (at this point)
Sweat Equity (up to this point):
· 85% ME
· 5% “A”
· 5% “B”
· 5% “C”
So 15 to 30 would make a difference.
Plus for me my last partner and I got along great so probably more biased towards a partner. When I first opened my business it was just me and if I wanted to go away I either had to close down or trust a hourly employee to run the store. When I got the partner I felt much better about going away. And this was in the computer/Internet technology field.
Artist might be a different breed of person to deal with.
Its been a good discussion topic t

Good Luck
Mark

Susie · May 12th, 2008

SS and Drummerstar thanks for your kind words.

There are maybe two people in the entire world I would trust to be a business partner of mine. No, wait, one. Well, maybe. They're a pain 99.99% of the time - I don't care who they are. Seen and heard too many nightmares - destroys marriages, life-long friendships, families. You do hear the odd success story. And I mean ODD. It's not about being cynical - it's business. People just cannot handle the risks we take and I wouldn't dream of taking anyone on a project.

Honestly, I do get fed up when people don't want to hear straight talk - you're supposed to pretend you're saying this... when you really mean this...and you have to frame it like this...so much of the time I don't even bother having conversations with most people 'cause it's all like play-acting and it's meaningless.

Good luck you guys.
Sue

cookiesa · May 12th, 2008

The best way to wreck a good friendship is to get married... partnerships are generally the same thing!

As Susie and others have said more often than don't end well. Even just the fact of going in to work becomes a drag because you know there is going to be conflict! (You may as well go and work for someone, at least then you don't have the risk!) To me it defeats the point of working for yourself.

That said it might be worth looking at alternatives. I think the most important thing is to make sure any "deal" or arrangement has a lifetime. I allowed a friend to use the store room in our shop for a new business she was starting (internet based from home) as she didn't have a secure undercover area to keep stock (smallish items) but it was limited to 6 months and 1 part of the storerrom which we marked out. Things took off and by about month 4 she got a storage unit for the stock as she needed the room and the sales were there to pay for it.

If it hadn't have worked out she knew the stock had to be gone. In return she put links on her website and sent my flyer enclosed with every order. The "rent" on the space was she would work one saturday morning a fortnight in the shop for me to have off (we were open 5 and a half days). She used it to tidy her stock and also served customers for me. It worked well

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