Question
I've been talking to a reputable outsourcing company about doing a software project with them where I would lead a team and would implement an PaaS project that I have in the early-stage.
The idea and expertise are mine: I have a very good understanding of the product and market, and I have proven experience in training and leading a team.
They would help me with formulating a business plan, office space, and salary for me and 2 others (full-time), help with recruitment etc. for the foreseeable future (6-12 months).
We will be using fairly new tech, and they'll require us to spread the knowledge to the larger team (70-100 people) by doing trainings, workshops, etc.
In addition, it's likely they'll need me for some client-facing work for their blooming outsourcing business in the EU: 2-3 days at a time to act as tech consultant for prospects.
All in all, it looks like a great partnership, and they seem genuinely nice people, with a proven record, with whom I'd like to work.
They're offering a competitive salary for a senior-level programmer, not quite there for a technical team lead. In addition, they asked me to name a percentage of shares that I'd like to have.
How do I evaluate? What split seems fair?
Thank you very much for any insights!
Answer
Hi, I have many years experience in structuring various partnerships, JV's and business entities.
Depending on the structure, it should be based on the level of each parters' paid in capital. You put in 20%, you get 20%. That's the easy way. However, when you are going to a JV/partner that is supplying more than just capital, you would need to come to an agreement with the company as to the intangible value of what they are providing in addition to cash. So, if the cash is worth $XX and their services, time and other assets are worth $YY, then they may be entitled to a larger share than you.
I hope this helps on the process to value. If you would like assistance in the valuation of the share split and negotiation of a fair structure, feel free to contact me directly at: interwealth@email.com.
Best of luck,
Craig
