Hello,
My name is Ryan. I run a small video production company in Denver, CO. I started the business 4 years ago, however since day one I've used the business as more of a side hustle than a full-time job. Last year I decided I wanted to take the business to the next level so I began putting more time & work into it (while working a full-time job). We did a little over $100k net last year and this year we're on track to doing a little over $200k in net.
I want to continue this pattern of growth & have started to invest more heavily in marketing & advertising. I've also quit my full-time job to run the business full-time. Up to this point I've worn most of the hats in the business while hiring video & sales contractors/freelancers when I need the extra help. I believe I'm at the point where I've taken on as much as I can handle by myself and I'm ready to bring someone on that can help my business grow. My idea is to hire my best video contractor (by far) as the "Head of Video Production" for the company that way I can focus on the high level goals for the company (marketing, sales, and other strategies that will help the business grow).
My question is what do I offer this contractor in terms of salary &/or equity so that he is enticed enough to want to leave his current job and join my growing company? This contractor's current job pays about $75k w/benefits. This person would be a pivotal piece of the company that would not only enhance the quality of work, but also free up my time to focus on high level tasks that will grow the business. My idea is to offer him a few options:
(based on projected $500k annual net income)
OPTION 1: $30k + 10% equity ($500k net income = $80k / $1mil rev = $130k)
OPTION 2: $50k + 5% equity ($500k net income = $75k / $1mil rev = $100k)
OPTION 3: $70k + 2.5% equity ($500k net income = $82,500 / $1mil rev = $95k)
Do these seem like logical options? If not, what do you think makes most sense?
Any advice is greatly appreciated. Thank you in advance!
My name is Ryan. I run a small video production company in Denver, CO. I started the business 4 years ago, however since day one I've used the business as more of a side hustle than a full-time job. Last year I decided I wanted to take the business to the next level so I began putting more time & work into it (while working a full-time job). We did a little over $100k net last year and this year we're on track to doing a little over $200k in net.
I want to continue this pattern of growth & have started to invest more heavily in marketing & advertising. I've also quit my full-time job to run the business full-time. Up to this point I've worn most of the hats in the business while hiring video & sales contractors/freelancers when I need the extra help. I believe I'm at the point where I've taken on as much as I can handle by myself and I'm ready to bring someone on that can help my business grow. My idea is to hire my best video contractor (by far) as the "Head of Video Production" for the company that way I can focus on the high level goals for the company (marketing, sales, and other strategies that will help the business grow).
My question is what do I offer this contractor in terms of salary &/or equity so that he is enticed enough to want to leave his current job and join my growing company? This contractor's current job pays about $75k w/benefits. This person would be a pivotal piece of the company that would not only enhance the quality of work, but also free up my time to focus on high level tasks that will grow the business. My idea is to offer him a few options:
(based on projected $500k annual net income)
OPTION 1: $30k + 10% equity ($500k net income = $80k / $1mil rev = $130k)
OPTION 2: $50k + 5% equity ($500k net income = $75k / $1mil rev = $100k)
OPTION 3: $70k + 2.5% equity ($500k net income = $82,500 / $1mil rev = $95k)
Do these seem like logical options? If not, what do you think makes most sense?
Any advice is greatly appreciated. Thank you in advance!
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