[Big Lucky]

Hello all,

Nice site nice people...

Good timing, finding it too! I am currently involved with an up and coming UK streetwear brand which have a great back and new catalogue of T designs.

The owners of the brand which has been running for over 3 years (so still in its infancy) have been approached by an 'agent' and 'a proven successful major marketing/sales man' who are interested in the brand and what it has to offer.

The dilemma- They want to invest time and money into taking the brand to its 'next' level and have made various offers but all resulting in the owners giving up over 60% of the company. This would leave the owners with out control of the company but in control of the patent and creative direction.

What should they do, what sort of financial or other investment should they be looking for, is 60% too much or usual in this industry?

Any advice or ideas would be greatly appreciated.

Thanking you.

 

[Rodney]

Hey Andy, welcome to the T-Shirt Forums.

I wish I could be of more help to you, but I haven't had any experience with agents yet.

 

[Solmu]

I haven't been in that situation myself, so take this with a pinch of salt and all that, but...

In principle it's an easy decision - it's only the specifics that make it hard. If the company has a strong emotional attachment and being the owner/director is important... retain a controlling interest. If it's more than just a business, money won't buy off the regret.

If the company is an enjoyable creative outlet, but ultimately about making money, then it's simply a matter of whether or not it's a good offer. It doesn't really matter whether or not 60% is industry standard (although it does help to know for negotiating), but more just the answer to the question "Is the amount of money I am getting out of this more than what I was hoping to achieve in this timeframe?"

It sounds like the agent is offering an injection of capital into the business itself and a bit of marketing/connections... and in return he wants 60% of the company. If it was my company I'd tell them to kindly f*** off (note that this is an emotional decision and not necessarily the sound business decision). If the deal involves a cash payout to the owners (i.e. not just what amounts to stock options in your newfound position as underling in the company you started) that is an extremely different matter, and one I would seriously consider engaging in.

What I'm saying though, is if it was me - in order to give up 60% I'd need more than just the knowledge that my 40% is bigger than my old 100% - I'd need something significant upfront to ease the pain.