Forum Moderators: LifeinAsia
As they’ve offered a 25% share to myself it will be well worth my while to make a go of it, however as they are based abroad I’m not convinced that should all go to plan, the day won’t come when they think to themselves – “well the sites done and working what are we paying this guy 25% for lets hire someone cheaper”.
Normally I would safeguard myself with all necessary usernames and passwords but in this instance they have been careful to arrange all the registrations, etc themselves so apart from a written agreement – that would take years to enforce in the country in question (where the business is based), does anyone have any suggestions as to how I could approach the situation.
Any help would be hugely appreciated.
(Better yet, walk away with the idea. Find some people you trust and make it work.)
There certainly are a lot of open-ended variables that come into a decision like this. Are these people that you knew previously, or did they contact you out of the blue? How much do you know about doing business in the country in question? What formal business entities exist and are they willing to create one in which you formally have a stake?
If you are uneasy about it, and you can't easily travel to that country in case there is a dispute, or any of a hundred other considerations, I say you are better off taking it on as a standard project (with up-front payments) rather than on an equity arrangement. Even when you know people from childhood and live down the street from them, there are a lot of things that can happen to prevent that equity stake from ever amounting to anything.
Primarily, the thing to consider is: what risk are you taking AND is that an acceptable risk? It would seem that principal risk is that you will be investing time (and probably a little cash) to do the development. Are there other legal risks?
I'm rambling - but I think you should get the picture.
The two most important people you outsource are your attorney and your CPA. Hire people you can trust, work with, and respect. Then LISTEN to them, and do not begrudge what you pay them....
if you don't own/control the above, then you can be cut out of the deal too easily later on when you've already done all of the hard work.
Always do the right thing! In this case, it is run IMHO!
you need to own the domain name & look after all of the hosting etc. & own the copyright to all of the website.
if you don't own/control the above, then you can be cut out of the deal too easily later on when you've already done all of the hard work.
They'll feel the same way about it.
TJ
I would you suggest, either you buy and develop a new domain or ask them to transfer the domain to you. Long distance relationships are very risky.
If you have not done a background check [webmasterworld.com] on your potential partners/investors do so before proceeding.
One possible solution (which my lawyer and accountant developed for a similar problem some years ago) is to incorporate a company specifically for the project.
The other side put up an initial cash infusion and then, at predetermined milestones, bought out my stock to a set limit. I retained majority stock (and so had control until quite late in the process). It was complex and not something I would have done but for the profit potential.
