Business model suggestions, any ideas?

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Business model suggestions, any ideas?

Jonathan Geitner

Hi all

I hope everyone's well and managing to break away from work for a minute & step outside to enjoy summer!  Hopefully it'll stay longer than this one week also!

Anyone have any ideas?

I've a business set up, Rocket Sports - launching in 4-5 weeks and I've two people wanting to work with me on this new start up.  

They both understand I can't pay them anything right now, and are both really happy to simply help out in terms of one for marketing and the other for driving sales - they both love the concept and are keen simply to see Rocket Sports successful.

Thus, I do want them to come on board and although am not really wanting to give % stakes of the business away wanted to hear of any suggestions relating to shares of profits after "£x" amount is brought in and up to a certain limit.  Also if anyone can recommend somewhere to find easy contracts to this nature.

Just FYI they're also not asking for anything in terms of wanting a stake in the business as it is anyway, although its something should things pan out well, I'd be happy to look at long term.

I would like them to be rewarded well and look after them, I do value their feedback and help, but want to stay in control of the business.  I've been burnt by business partners before so am cautious now.

On this, I've also someone wanting to take this business to Australia, and someone else interested in taking this to France, thus is there anyone also with advice about franchising businesses?

Kind regards

Jonathan

Jonathan Geitner
t: +44 (0) 7867 782 495
e: [hidden email]






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Re: Business model suggestions, any ideas?

Omkar Joshi
Jonathan,
 
I think the first question has been dealt with many times on this forum. I won't go too much into the detail but personally, I would always give the key employees some equity stake in the venture. If you value them and their input so much, you should definitely considering offering them some form of equity that would provide uncapped returns in the long term (bonuses and commissions are eventually short term remuneration and are unlikely to keep key staff motivated for long). And btw, until you give up 50%, you will always remain in control anyway.
 
The other question of franschising is an interesting one. As a general rule of thumb, I consider franchising as very risky or profit-limiting. If you are a renowned brand looking to scale up very quickly then franchising would be an easy route but then you run the risk of the brand being diluted substantially if you don't exercise proper control over the frachisee operations.
 
If you are a start-up (which is what I believe is your case), its too early to go the franchising route. You should focus on getting the business successful in the UK before thinking of other geographies. If you are successful then you will find partners/investors etc to scale the business and take it to new markets. Franchising does involve a substantial amount of time and effort and that would be time that is not spent on your new business - not a good idea!
 
Lastly, I believe that if you are really good at doing something, why let someone else do it for you? If you are successful with this venture in one geography and have aspirations to expand it to other markets, then hire the best people out there and do it yourself. In the past franchising was used to make it easy to raise capital from local investors (similar to crowdfunding, if you ask me) and expand quickly. But today boundaries have been reduced dramatically and expading your business (particularly web-enabled) to other parts of the world is much easier than it used to be, say 10 years back.
 
So my advice would be to focus on your existing business and get it to a point where you would like to build scale. Then raise capital and hire talent to expand to other countries!
 
Hope this helps.
 
Good luck,
Omkar

On Mon, May 24, 2010 at 12:42 PM, Jonathan Geitner <[hidden email]> wrote:

Hi all

I hope everyone's well and managing to break away from work for a minute & step outside to enjoy summer!  Hopefully it'll stay longer than this one week also!

Anyone have any ideas?

I've a business set up, Rocket Sports - launching in 4-5 weeks and I've two people wanting to work with me on this new start up.  

They both understand I can't pay them anything right now, and are both really happy to simply help out in terms of one for marketing and the other for driving sales - they both love the concept and are keen simply to see Rocket Sports successful.

Thus, I do want them to come on board and although am not really wanting to give % stakes of the business away wanted to hear of any suggestions relating to shares of profits after "£x" amount is brought in and up to a certain limit.  Also if anyone can recommend somewhere to find easy contracts to this nature.

Just FYI they're also not asking for anything in terms of wanting a stake in the business as it is anyway, although its something should things pan out well, I'd be happy to look at long term.

I would like them to be rewarded well and look after them, I do value their feedback and help, but want to stay in control of the business.  I've been burnt by business partners before so am cautious now.

On this, I've also someone wanting to take this business to Australia, and someone else interested in taking this to France, thus is there anyone also with advice about franchising businesses?

Kind regards

Jonathan

Jonathan Geitner
t: +44 (0) 7867 782 495
e: [hidden email]






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Re: Business model suggestions, any ideas?

FTired
Administrator
In reply to this post by Jonathan Geitner
'Control' is a very complicated word when it comes to startups, in fact when it comes to business, 50% shareholding does not guarantee anything.

Iqbal



From: Omkar Joshi <[hidden email]>
To: [hidden email]
Sent: Mon, 24 May, 2010 13:49:34
Subject: Re: [entrepreneur-1056] Business model suggestions, any ideas?

Jonathan,
 
I think the first question has been dealt with many times on this forum. I won't go too much into the detail but personally, I would always give the key employees some equity stake in the venture. If you value them and their input so much, you should definitely considering offering them some form of equity that would provide uncapped returns in the long term (bonuses and commissions are eventually short term remuneration and are unlikely to keep key staff motivated for long). And btw, until you give up 50%, you will always remain in control anyway.
 
The other question of franschising is an interesting one. As a general rule of thumb, I consider franchising as very risky or profit-limiting. If you are a renowned brand looking to scale up very quickly then franchising would be an easy route but then you run the risk of the brand being diluted substantially if you don't exercise proper control over the frachisee operations.
 
If you are a start-up (which is what I believe is your case), its too early to go the franchising route. You should focus on getting the business successful in the UK before thinking of other geographies. If you are successful then you will find partners/investors etc to scale the business and take it to new markets. Franchising does involve a substantial amount of time and effort and that would be time that is not spent on your new business - not a good idea!
 
Lastly, I believe that if you are really good at doing something, why let someone else do it for you? If you are successful with this venture in one geography and have aspirations to expand it to other markets, then hire the best people out there and do it yourself. In the past franchising was used to make it easy to raise capital from local investors (similar to crowdfunding, if you ask me) and expand quickly. But today boundaries have been reduced dramatically and expading your business (particularly web-enabled) to other parts of the world is much easier than it used to be, say 10 years back.
 
So my advice would be to focus on your existing business and get it to a point where you would like to build scale. Then raise capital and hire talent to expand to other countries!
 
Hope this helps.
 
Good luck,
Omkar

On Mon, May 24, 2010 at 12:42 PM, Jonathan Geitner <[hidden email]> wrote:

Hi all

I hope everyone's well and managing to break away from work for a minute & step outside to enjoy summer!  Hopefully it'll stay longer than this one week also!

Anyone have any ideas?

I've a business set up, Rocket Sports - launching in 4-5 weeks and I've two people wanting to work with me on this new start up.  

They both understand I can't pay them anything right now, and are both really happy to simply help out in terms of one for marketing and the other for driving sales - they both love the concept and are keen simply to see Rocket Sports successful.

Thus, I do want them to come on board and although am not really wanting to give % stakes of the business away wanted to hear of any suggestions relating to shares of profits after "£x" amount is brought in and up to a certain limit.  Also if anyone can recommend somewhere to find easy contracts to this nature.

Just FYI they're also not asking for anything in terms of wanting a stake in the business as it is anyway, although its something should things pan out well, I'd be happy to look at long term.

I would like them to be rewarded well and look after them, I do value their feedback and help, but want to stay in control of the business.  I've been burnt by business partners before so am cautious now.

On this, I've also someone wanting to take this business to Australia, and someone else interested in taking this to France, thus is there anyone also with advice about franchising businesses?

Kind regards

Jonathan

Jonathan Geitner
t: +44 (0) 7867 782 495
e: [hidden email]






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RE: Business model suggestions, any ideas?

Brian Milnes
In reply to this post by Jonathan Geitner

50% plus 1 share is better than 50%. But I’ve seen original majority shareholders having their shareholdings diluted by subterfuge (watch out for what powers are vested in the directors hands), and to find they’ve been squeezed out of their own company…

 

From: [hidden email] [mailto:[hidden email]] On Behalf Of iqbalgandham
Sent: 24 May 2010 15:03
To: [hidden email]
Subject: Re: [entrepreneur-1056] Business model suggestions, any ideas?

 

'Control' is a very complicated word when it comes to startups, in fact when it comes to business, 50% shareholding does not guarantee anything.

Iqbal

 

 


From: Omkar Joshi <[hidden email]>
To: [hidden email]
Sent: Mon, 24 May, 2010 13:49:34
Subject: Re: [entrepreneur-1056] Business model suggestions, any ideas?

Jonathan,

 

I think the first question has been dealt with many times on this forum. I won't go too much into the detail but personally, I would always give the key employees some equity stake in the venture. If you value them and their input so much, you should definitely considering offering them some form of equity that would provide uncapped returns in the long term (bonuses and commissions are eventually short term remuneration and are unlikely to keep key staff motivated for long). And btw, until you give up 50%, you will always remain in control anyway.

 

The other question of franschising is an interesting one. As a general rule of thumb, I consider franchising as very risky or profit-limiting. If you are a renowned brand looking to scale up very quickly then franchising would be an easy route but then you run the risk of the brand being diluted substantially if you don't exercise proper control over the frachisee operations.

 

If you are a start-up (which is what I believe is your case), its too early to go the franchising route. You should focus on getting the business successful in the UK before thinking of other geographies. If you are successful then you will find partners/investors etc to scale the business and take it to new markets. Franchising does involve a substantial amount of time and effort and that would be time that is not spent on your new business - not a good idea!

 

Lastly, I believe that if you are really good at doing something, why let someone else do it for you? If you are successful with this venture in one geography and have aspirations to expand it to other markets, then hire the best people out there and do it yourself. In the past franchising was used to make it easy to raise capital from local investors (similar to crowdfunding, if you ask me) and expand quickly. But today boundaries have been reduced dramatically and expading your business (particularly web-enabled) to other parts of the world is much easier than it used to be, say 10 years back.

 

So my advice would be to focus on your existing business and get it to a point where you would like to build scale. Then raise capital and hire talent to expand to other countries!

 

Hope this helps.

 

Good luck,

Omkar

On Mon, May 24, 2010 at 12:42 PM, Jonathan Geitner <[hidden email]> wrote:

 

Hi all

 

I hope everyone's well and managing to break away from work for a minute & step outside to enjoy summer!  Hopefully it'll stay longer than this one week also!

 

Anyone have any ideas?

 

I've a business set up, Rocket Sports - launching in 4-5 weeks and I've two people wanting to work with me on this new start up.  

 

They both understand I can't pay them anything right now, and are both really happy to simply help out in terms of one for marketing and the other for driving sales - they both love the concept and are keen simply to see Rocket Sports successful.

 

Thus, I do want them to come on board and although am not really wanting to give % stakes of the business away wanted to hear of any suggestions relating to shares of profits after "£x" amount is brought in and up to a certain limit.  Also if anyone can recommend somewhere to find easy contracts to this nature.

 

Just FYI they're also not asking for anything in terms of wanting a stake in the business as it is anyway, although its something should things pan out well, I'd be happy to look at long term.

 

I would like them to be rewarded well and look after them, I do value their feedback and help, but want to stay in control of the business.  I've been burnt by business partners before so am cautious now.

 

On this, I've also someone wanting to take this business to Australia, and someone else interested in taking this to France, thus is there anyone also with advice about franchising businesses?

 

Kind regards

Jonathan

Jonathan Geitner
t: +44 (0) 7867 782 495
e: [hidden email]

 





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Re: Business model suggestions, any ideas?

David Nordell
In reply to this post by Jonathan Geitner
Unfortunately, both Brian and Iqbal are completely right about this. VCs in the USA and Israel will normally put a clause into the investment contract that essentially strips the founding shareholders of their holdings and then vests the stock back to them over several years, normally with full vesting in the case of a liquidity event (IPO, sale to another company) even before that date. If you meet your milestones and your VCs are honest (two big ifs), then it doesn't matter. If not, you can be tossed out without even the value of your stock.

I've also seen a very promising Israeli start-up destroyed by its US-based VCs insisting on appointing 'professional' managers in the USA who just ate up money without contributing any value at all; but that's another story.

David Nordell
Founder & CEO
New Global Markets
www.newglobalmarkets.com
+44 (79) 8879-2163


 

Sent from my BlackBerry® smartphone


From: Brian Milnes <[hidden email]>
Date: Mon, 24 May 2010 10:18:08 -0400
Subject: RE: [entrepreneur-1056] Business model suggestions, any ideas?

50% plus 1 share is better than 50%. But I’ve seen original majority shareholders having their shareholdings diluted by subterfuge (watch out for what powers are vested in the directors hands), and to find they’ve been squeezed out of their own company…

 

From: [hidden email] [mailto:[hidden email]] On Behalf Of iqbalgandham
Sent: 24 May 2010 15:03
To: [hidden email]
Subject: Re: [entrepreneur-1056] Business model suggestions, any ideas?

 

'Control' is a very complicated word when it comes to startups, in fact when it comes to business, 50% shareholding does not guarantee anything.

Iqbal

 

 


From: Omkar Joshi <[hidden email]>
To: [hidden email]
Sent: Mon, 24 May, 2010 13:49:34
Subject: Re: [entrepreneur-1056] Business model suggestions, any ideas?

Jonathan,

 

I think the first question has been dealt with many times on this forum. I won't go too much into the detail but personally, I would always give the key employees some equity stake in the venture. If you value them and their input so much, you should definitely considering offering them some form of equity that would provide uncapped returns in the long term (bonuses and commissions are eventually short term remuneration and are unlikely to keep key staff motivated for long). And btw, until you give up 50%, you will always remain in control anyway.

 

The other question of franschising is an interesting one. As a general rule of thumb, I consider franchising as very risky or profit-limiting. If you are a renowned brand looking to scale up very quickly then franchising would be an easy route but then you run the risk of the brand being diluted substantially if you don't exercise proper control over the frachisee operations.

 

If you are a start-up (which is what I believe is your case), its too early to go the franchising route. You should focus on getting the business successful in the UK before thinking of other geographies. If you are successful then you will find partners/investors etc to scale the business and take it to new markets. Franchising does involve a substantial amount of time and effort and that would be time that is not spent on your new business - not a good idea!

 

Lastly, I believe that if you are really good at doing something, why let someone else do it for you? If you are successful with this venture in one geography and have aspirations to expand it to other markets, then hire the best people out there and do it yourself. In the past franchising was used to make it easy to raise capital from local investors (similar to crowdfunding, if you ask me) and expand quickly. But today boundaries have been reduced dramatically and expading your business (particularly web-enabled) to other parts of the world is much easier than it used to be, say 10 years back.

 

So my advice would be to focus on your existing business and get it to a point where you would like to build scale. Then raise capital and hire talent to expand to other countries!

 

Hope this helps.

 

Good luck,

Omkar

On Mon, May 24, 2010 at 12:42 PM, Jonathan Geitner <[hidden email]> wrote:

 

Hi all

 

I hope everyone's well and managing to break away from work for a minute & step outside to enjoy summer!  Hopefully it'll stay longer than this one week also!

 

Anyone have any ideas?

 

I've a business set up, Rocket Sports - launching in 4-5 weeks and I've two people wanting to work with me on this new start up.  

 

They both understand I can't pay them anything right now, and are both really happy to simply help out in terms of one for marketing and the other for driving sales - they both love the concept and are keen simply to see Rocket Sports successful.

 

Thus, I do want them to come on board and although am not really wanting to give % stakes of the business away wanted to hear of any suggestions relating to shares of profits after "£x" amount is brought in and up to a certain limit.  Also if anyone can recommend somewhere to find easy contracts to this nature.

 

Just FYI they're also not asking for anything in terms of wanting a stake in the business as it is anyway, although its something should things pan out well, I'd be happy to look at long term.

 

I would like them to be rewarded well and look after them, I do value their feedback and help, but want to stay in control of the business.  I've been burnt by business partners before so am cautious now.

 

On this, I've also someone wanting to take this business to Australia, and someone else interested in taking this to France, thus is there anyone also with advice about franchising businesses?

 

Kind regards

Jonathan

Jonathan Geitner
t: +44 (0) 7867 782 495
e: [hidden email]

 





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Re: Business model suggestions, any ideas?

Deborah Huisken
In reply to this post by Jonathan Geitner
David et al -

That "other story" about "professional" managers being brought in is not a minor issue in my experience. 

Between those outside managers and the VC's financial control – which they can be ruthless in wielding to protect their financial interests – the whole face of a company and its products can be changed.  If their values are different to yours and you're not meeting your targets or want additional financing, they win...

Using venture capital is, in my experience, a very risky route to take for all involved.

Deborah

On Mon, May 24, 2010 at 10:55 AM, David Nordell <[hidden email]> wrote:
Unfortunately, both Brian and Iqbal are completely right about this. VCs in the USA and Israel will normally put a clause into the investment contract that essentially strips the founding shareholders of their holdings and then vests the stock back to them over several years, normally with full vesting in the case of a liquidity event (IPO, sale to another company) even before that date. If you meet your milestones and your VCs are honest (two big ifs), then it doesn't matter. If not, you can be tossed out without even the value of your stock.

I've also seen a very promising Israeli start-up destroyed by its US-based VCs insisting on appointing 'professional' managers in the USA who just ate up money without contributing any value at all; but that's another story.

David Nordell
Founder & CEO
New Global Markets
www.newglobalmarkets.com
+44 (79) 8879-2163


 

Sent from my BlackBerry® smartphone


From: Brian Milnes <[hidden email]>
Date: Mon, 24 May 2010 10:18:08 -0400
Subject: RE: [entrepreneur-1056] Business model suggestions, any ideas?

50% plus 1 share is better than 50%. But I’ve seen original majority shareholders having their shareholdings diluted by subterfuge (watch out for what powers are vested in the directors hands), and to find they’ve been squeezed out of their own company…

 

From: [hidden email] [mailto:[hidden email]] On Behalf Of iqbalgandham
Sent: 24 May 2010 15:03
To: [hidden email]
Subject: Re: [entrepreneur-1056] Business model suggestions, any ideas?

 

'Control' is a very complicated word when it comes to startups, in fact when it comes to business, 50% shareholding does not guarantee anything.

Iqbal

 

 


From: Omkar Joshi <[hidden email]>
To: [hidden email]
Sent: Mon, 24 May, 2010 13:49:34
Subject: Re: [entrepreneur-1056] Business model suggestions, any ideas?

Jonathan,

 

I think the first question has been dealt with many times on this forum. I won't go too much into the detail but personally, I would always give the key employees some equity stake in the venture. If you value them and their input so much, you should definitely considering offering them some form of equity that would provide uncapped returns in the long term (bonuses and commissions are eventually short term remuneration and are unlikely to keep key staff motivated for long). And btw, until you give up 50%, you will always remain in control anyway.

 

The other question of franschising is an interesting one. As a general rule of thumb, I consider franchising as very risky or profit-limiting. If you are a renowned brand looking to scale up very quickly then franchising would be an easy route but then you run the risk of the brand being diluted substantially if you don't exercise proper control over the frachisee operations.

 

If you are a start-up (which is what I believe is your case), its too early to go the franchising route. You should focus on getting the business successful in the UK before thinking of other geographies. If you are successful then you will find partners/investors etc to scale the business and take it to new markets. Franchising does involve a substantial amount of time and effort and that would be time that is not spent on your new business - not a good idea!

 

Lastly, I believe that if you are really good at doing something, why let someone else do it for you? If you are successful with this venture in one geography and have aspirations to expand it to other markets, then hire the best people out there and do it yourself. In the past franchising was used to make it easy to raise capital from local investors (similar to crowdfunding, if you ask me) and expand quickly. But today boundaries have been reduced dramatically and expading your business (particularly web-enabled) to other parts of the world is much easier than it used to be, say 10 years back.

 

So my advice would be to focus on your existing business and get it to a point where you would like to build scale. Then raise capital and hire talent to expand to other countries!

 

Hope this helps.

 

Good luck,

Omkar

On Mon, May 24, 2010 at 12:42 PM, Jonathan Geitner <[hidden email]> wrote:

 

Hi all

 

I hope everyone's well and managing to break away from work for a minute & step outside to enjoy summer!  Hopefully it'll stay longer than this one week also!

 

Anyone have any ideas?

 

I've a business set up, Rocket Sports - launching in 4-5 weeks and I've two people wanting to work with me on this new start up.  

 

They both understand I can't pay them anything right now, and are both really happy to simply help out in terms of one for marketing and the other for driving sales - they both love the concept and are keen simply to see Rocket Sports successful.

 

Thus, I do want them to come on board and although am not really wanting to give % stakes of the business away wanted to hear of any suggestions relating to shares of profits after "£x" amount is brought in and up to a certain limit.  Also if anyone can recommend somewhere to find easy contracts to this nature.

 

Just FYI they're also not asking for anything in terms of wanting a stake in the business as it is anyway, although its something should things pan out well, I'd be happy to look at long term.

 

I would like them to be rewarded well and look after them, I do value their feedback and help, but want to stay in control of the business.  I've been burnt by business partners before so am cautious now.

 

On this, I've also someone wanting to take this business to Australia, and someone else interested in taking this to France, thus is there anyone also with advice about franchising businesses?

 

Kind regards

Jonathan

Jonathan Geitner
t: +44 (0) 7867 782 495
e: [hidden email]

 





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Deborah Huisken, PCC
Dancing Star International
Partnering with savvy entrepreneurs to
 develop their businesses and themselves
UK cell:  0798 521-4520
VoIP:  +1 617 275-5706
Skype:  deborahhuis
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