Share structure....

[Ultraviolet]

All

I'm working with a partner company to get my new venture off the ground. The company will be looking for a shareholding in my venture, in return for introductions etc.

I'm (obviously) keen that the partner company is only rewarded with equity when they have delivered to certain milestones.

Any suggestions on the best way to do this? Can I create an amount of unallocated shares and then award an amount to the partner upon completion of each milestone?

UV

Edited by Ultraviolet on Monday 9th March 10:02

[Eric Mc]

Sounds rather vague to me.

You give them part ownership of your business so that they can povide you with contact names that may or may not generate profit?

Why not use them on a simple commission basis?

[Ultraviolet]

Thanks Eric

Not all the services will result in direct revenue - some are related to backoffice etc. So commission will work for the sales activity, but not for marketing, backoffice services etc.

I guess a more precise way of phrasing it would be:

"how can I reward another party with equity in my company upon the completion of a specific task or deliverable?"

Cheers,
UV

[therealpigdog]

You could grant them a certain level of equity initially, with an option to call on the company for the issue of more shares once the criteria has been met.

Relatively simple, but I'd recomend you get a lawyer to draft the option agreement for you - the real trick is in nailing down what the criteria is, and then how the option is excercised.

[Eric Mc]

Why is it important that you grant tem equity?