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    FS Forum Support, post: 220240, member: 49676 wrote:
    Hi Alex,

    As HarryLuke says, I would expect the partnership and the loan to be separate things. This is particularly true if he’s charging you interest on the loan (because he’s already being compensated for the loan).

    If the loan is interest free then that is genuinely worth $ in value to you so he could possibly offer you a lower percentage because he may feel he’s bringing more to the deal. Note: You can calculate that amount in $ (the amount of interest the free loan saves you versus a bank loan).

    In the end it’s up to you what deal you want to make. If your alternative sucks (i.e. missing out on the deal) then a lower % may still be a good deal for you.

    If you’re really keen to keep to 50/50 then you could offer to pay interest on the loan at market rates to even the ledger. That makes a statement that you want a legit full partnership and are willing to pay your way.

    Good luck!


    Thanks for the input Dave.

    As for the loan. Basically he will be borrowing from the bank to fund my part of the investment. Which means I will be paying interest.

    • Total posts: 4,485

    Just to pick up another point as well as that mentioned by Dave and Bourgeoisie, sometimes it is not only the financials that are put on the table in regards to ownership, sure you may be paying half, and at full market interest rates. But also how much of the intellectual property and other non tangible things is he bringing to the table, which may be worth a percentage of the overall business as well.
    Its a delicate one, and as I said before I would have difficulty in going into something on that basis, BUT if you see this as a worthwhile adventure, and are willing to give up a percentage based on what he is bringing to the table, go for it. And that may be more then 1%, sometimes the intangible things are worth 10 to 20% just depends on how big the table is.

    Jason Ramage
    • Total posts: 3,164

    Being a franchise operation, most IP is allocated via the franchise group and as such you are pretty much ‘managers’ or ‘caretakers’ of the business.

    What should you be willing to give up – NOTHING really, this isnt the question you have started with.. I dont really think you will get an answer here, it is PERSONAL and only you will know what you can tolerate.

    To answer from a logical perspective, which i implore you view this from, if you are putting 50/50 in financially it would tend to be a 50/50 split. May i also suggest, wait for the conversation… The more you think of each possible scenario, the more you will do your head in and the more you will muddy the waters when you are chatting about it.. If you ARM yourself with a decision, you may have a conversation about this with your intended partner and whilst he is talking, all you are doing is waiting to spew forth your input without actually listening to what is before you.

    My advice! WAIT! have a chat about it with this person as he/she may throw a completely different angle at you and with them being in a greater position than you are, you will need to consider any proposal from this person.. Even though they are lending you the funds through ‘funding’, you arent really contributing to the repayment as it is both of your business that will be enabling this and WITHOUT your partner, there is NO BUSINESS :)

    The next question is, are you willing to walk if you dont get what YOU want.. BUT WHAT DO YOU WANT? ignore us, what we see fair and what is or is not fair but WHAT DO YOU WANT?

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    • Total posts: 8

    Thanks for the advice and help guys. I’ve still got a lot to learn, so I’m sure I’ll be reading more into these forums…

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