Hi everyone. I'm so glad I stumbled on this site.
I'm a creative director in a multinational advertising/design company. Throughout my 20 years in this profession, I've built a reputable portfolio and garnered lots of connections with clients and suppliers. I always believe if I start my own firm, it will eventually prosper. Unfortunately, the only thing holding me back is that I don't have the capital for it.
Recently, I've met this guy who is very interested to invest in this kind of business. He is an owner of a well established mid-size company specializing in events and exhibits. He figured, having a design business would further strengthen and retain his existing clients (since all exhibitors/events needs various marketing/advertising materials). And for me, this makes sense since I can start immediately to target his clients while going for bigger projects.
What he is proposing is that I will manage the entire operation of the business since he has 0% knowledge in advertising while he provides the capital and expenses. We haven't talked yet about the profit sharing and I'm hoping before we resume our meeting next week, I have at least some idea what is fair in this kind of arrangement.
I have a few questions:
-Am I categorized as an "industrial partner" since I wont be contributing financially but has the know-how to run the business
-What about the split of profit? Should it remain the same all throughout? Later on, what if the business gets bigger? Is it right to stipulate in our contract for a higher or possibly an equal split?
-The money that he will provide to start the business, will it be considered a loan and should be returned back in certain percentage accoding to profit? (Offhand, I think it shouldnt be the case and will only be liquidated once the business folds.)
-what else should I need to address on this arrangement?
Hope someone can help me out.
I'm a creative director in a multinational advertising/design company. Throughout my 20 years in this profession, I've built a reputable portfolio and garnered lots of connections with clients and suppliers. I always believe if I start my own firm, it will eventually prosper. Unfortunately, the only thing holding me back is that I don't have the capital for it.
Recently, I've met this guy who is very interested to invest in this kind of business. He is an owner of a well established mid-size company specializing in events and exhibits. He figured, having a design business would further strengthen and retain his existing clients (since all exhibitors/events needs various marketing/advertising materials). And for me, this makes sense since I can start immediately to target his clients while going for bigger projects.
What he is proposing is that I will manage the entire operation of the business since he has 0% knowledge in advertising while he provides the capital and expenses. We haven't talked yet about the profit sharing and I'm hoping before we resume our meeting next week, I have at least some idea what is fair in this kind of arrangement.
I have a few questions:
-Am I categorized as an "industrial partner" since I wont be contributing financially but has the know-how to run the business
-What about the split of profit? Should it remain the same all throughout? Later on, what if the business gets bigger? Is it right to stipulate in our contract for a higher or possibly an equal split?
-The money that he will provide to start the business, will it be considered a loan and should be returned back in certain percentage accoding to profit? (Offhand, I think it shouldnt be the case and will only be liquidated once the business folds.)
-what else should I need to address on this arrangement?
Hope someone can help me out.
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