Negotiating terms
Discussion
I'm going to be offered a job next week, the wages are about where I need them now. It's a small company owned by 2 partners employing about 6 other people, doing quite well for a number of years.
I'd be next in line after the partners mainly dealing with expanding the company.
I've never been in the position of negotiating terms, what I'd like is to gradually start "owning" a percentage of the company related to how it expands while I'm there. Suggestions on how I go about that?
For back ground, one partner started the business, the other bought a 50% share when it was just the 2 of them, so emotional attachment also involved. We've all been friends for a number of years as well.
I have no money to buy in even if that was an option.
Cheers.
I'd be next in line after the partners mainly dealing with expanding the company.
I've never been in the position of negotiating terms, what I'd like is to gradually start "owning" a percentage of the company related to how it expands while I'm there. Suggestions on how I go about that?
For back ground, one partner started the business, the other bought a 50% share when it was just the 2 of them, so emotional attachment also involved. We've all been friends for a number of years as well.
I have no money to buy in even if that was an option.
Cheers.
There are a few ways this could be achieved. The easiest way would be to tell them what you would like and let them come up with a solution. We were in a similar position. 2 of us owned all the shares & we want to provide ability for our team to buy in. We set up an EMI scheme where we grant options to buy shares in the firm. This is linked to the performance of the firm as the buy price is set at a certain period in time & ideally the firm is worth more at the point the options are exercised.
I have seen other firms sign an agreement to sell shares upon certain conditions being met (e.g. growth over a certain period). It can get complicated with valuations etc which is where EMI is good in that there is an agreed valuation (which may not be 100% correct but is a basis go go on).
I have seen other firms sign an agreement to sell shares upon certain conditions being met (e.g. growth over a certain period). It can get complicated with valuations etc which is where EMI is good in that there is an agreed valuation (which may not be 100% correct but is a basis go go on).
Great suggestion from bga.
The last two companies I worked for also offered this option. Larger companies tend to have a set maturity timescale before you can exercise the right to purchase shares.
My last company had a pretty straightforward system in that I was given a share price at 20% below that floated on the FTSE; I sacrificed between £50 to £250 of my gross monthly take home and after 3/5 years I could purchase the shares.
Worked out quite nicely as I bought the shares for circa £18 each and sold them at £41. The other handy thing about this is that you do not have to buy the shares at the end of the term. If the share price drops, you can opt to cash out and you get the money back.
The last two companies I worked for also offered this option. Larger companies tend to have a set maturity timescale before you can exercise the right to purchase shares.
My last company had a pretty straightforward system in that I was given a share price at 20% below that floated on the FTSE; I sacrificed between £50 to £250 of my gross monthly take home and after 3/5 years I could purchase the shares.
Worked out quite nicely as I bought the shares for circa £18 each and sold them at £41. The other handy thing about this is that you do not have to buy the shares at the end of the term. If the share price drops, you can opt to cash out and you get the money back.
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