New ask Hacker News story: Ask HN: Equity versus Profit Sharing
Ask HN: Equity versus Profit Sharing
3 by evo_9 | 4 comments on Hacker News.
I'm about to partner with a buddy that has an interesting business idea and the question of how to structure our partnership came up. Initially we were going to ask for equity/ownership in the new company we'll form (it's myself and another coder I work with taking on this side project); however after my partner and I talked about it and there are some risks/liabilities we would like to avoid. Long/short we are considering taking cash to build the app up-front, along with a percent of profit sharing. Our thinking is we can do the work at a discount depending on the percent they give us allowing them to decide how much they want to pay for the app versus % of profit sharing. This would allow us to be involved with the company beyond just building the app, but without taking on any of the legal responsibilities that could end up costing the company a lot. Just wondering if there are pros/cons to this arrangement that we haven't considered? Really any feedback on this arrangement is welcomed, I hadn't ever thought of this before, my partner came up with it after we dug into the details of the business and the liabilities became known.
3 by evo_9 | 4 comments on Hacker News.
I'm about to partner with a buddy that has an interesting business idea and the question of how to structure our partnership came up. Initially we were going to ask for equity/ownership in the new company we'll form (it's myself and another coder I work with taking on this side project); however after my partner and I talked about it and there are some risks/liabilities we would like to avoid. Long/short we are considering taking cash to build the app up-front, along with a percent of profit sharing. Our thinking is we can do the work at a discount depending on the percent they give us allowing them to decide how much they want to pay for the app versus % of profit sharing. This would allow us to be involved with the company beyond just building the app, but without taking on any of the legal responsibilities that could end up costing the company a lot. Just wondering if there are pros/cons to this arrangement that we haven't considered? Really any feedback on this arrangement is welcomed, I hadn't ever thought of this before, my partner came up with it after we dug into the details of the business and the liabilities became known.
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