Hi -
I have an investor/ partner and we are currently hashing out the details and numbers for our projected business plan and partnership. The product is high-end custom furniture to initially be exported and sold in South Korea. My partner is South Korean and has a number of contacts in this specific marketplace; in an previous business he exclusively sold a high-end American furniture line in Korea, so his knowledge and contacts are viable and niche. Initially he will be responsible for financing.
My role is product; I am responsible for creative direction, design, manufacturing, product placement, strategy and branding. As the designer, my specific aesthetic and approach is key to the product's point of view.
Long-term we have discussed having a retail/ gallery space in both South Korea and New York. For New York, he has discussed having a financial partner/ investor to finance the gallery space.
And to my question: we are about to put our first prototype into work, which will be a significant financial outlay for him, and bring my design work to life. Although I have known him for quite some time and trust him, I am wary of handing off my creative work without a contract in place. Additionally, as a wealthy businessman, he has a lawyer on call, I don't have that luxury.
He asked me to come to him with numbers, and I proposed a 50/50 ownership split. He went to his attorney, who countered by saying that a typical designer percentage would be 5-10%. My partner acknowledged that his attorney was acting in his best interest, and that he didn't expect me to accept that low a number, but I have to come back with some educated numbers, and I don't have the funds to hire a lawyer who knows about these things.
I am thinking of something like a 30% me to 70% him profit split until he recoups his investment, at which point the split would go to 50% 50%, but I'm really shooting in the dark here and am not sure how profit and ownership differ -
I'd appreciate any guidance as to what is a standard agreement for a partnership of this nature, and if you think a two tiered agreement is best.
Thanks in advance!
I have an investor/ partner and we are currently hashing out the details and numbers for our projected business plan and partnership. The product is high-end custom furniture to initially be exported and sold in South Korea. My partner is South Korean and has a number of contacts in this specific marketplace; in an previous business he exclusively sold a high-end American furniture line in Korea, so his knowledge and contacts are viable and niche. Initially he will be responsible for financing.
My role is product; I am responsible for creative direction, design, manufacturing, product placement, strategy and branding. As the designer, my specific aesthetic and approach is key to the product's point of view.
Long-term we have discussed having a retail/ gallery space in both South Korea and New York. For New York, he has discussed having a financial partner/ investor to finance the gallery space.
And to my question: we are about to put our first prototype into work, which will be a significant financial outlay for him, and bring my design work to life. Although I have known him for quite some time and trust him, I am wary of handing off my creative work without a contract in place. Additionally, as a wealthy businessman, he has a lawyer on call, I don't have that luxury.
He asked me to come to him with numbers, and I proposed a 50/50 ownership split. He went to his attorney, who countered by saying that a typical designer percentage would be 5-10%. My partner acknowledged that his attorney was acting in his best interest, and that he didn't expect me to accept that low a number, but I have to come back with some educated numbers, and I don't have the funds to hire a lawyer who knows about these things.
I am thinking of something like a 30% me to 70% him profit split until he recoups his investment, at which point the split would go to 50% 50%, but I'm really shooting in the dark here and am not sure how profit and ownership differ -
I'd appreciate any guidance as to what is a standard agreement for a partnership of this nature, and if you think a two tiered agreement is best.
Thanks in advance!
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