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Company owners want to do an share swap. Around 10% each.

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  • 13-01-2019 5:46am
    #1
    [Deleted User]
    Posts: 17,378 ✭✭✭✭


    A company's owners intending to resell my saas with offline services wants to do a 10% share swap.

    The first deal with a national government whose meeting is next week would be a life-changing monthly for me. Their revenue from it would mostly end in four years. The press releases alone will allow to me expand globally.


    Are there pitfalls to this? I'd rather my business finances be private but I also want my software to be the only one they ever use. There will be other deals so I'm not concerned about the revenue stopping on their end.

    I don't mind dishing out 10% to people who saw potential that I didn't, along with the contacts and experience I lack. They just want to lock in a nice income permanently for what they set up. The 10% I get will be worth less as their revenue stream from each project is temporary. Their shares would be limited to this country's operations.


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    #2
    antoinolachtnai
    Registered Users Posts: 9,793 ✭✭✭antoinolachtnai


    Spell this out for us. What are they swapping for what. Are you saying these people want to buy your company with shares? Or something else?


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    #3
    [Deleted User]
    Posts: 17,378 ✭✭✭✭ [Deleted User]


    antoinolachtnai wrote: »
    Spell this out for us. What are they swapping for what. Are you saying these people want to buy your company with shares? Or something else?

    I own my company and successfully did a deal with the company the other guys worked in. One left and set up his own company to resell what I have with significant bells and whistles. The second guy will leave and join his company if this deal happens.

    He wants us to give each other 10% personally for free if this deal happens. So I guess they'd get around 6.5% and 3.5% of mine.


    The deal would involve me signing directly with the government agency while they also sign for the offline stuff. I'd be on their payroll as well for six months as a consultant while it all gets set up.

    The two hurdles are me wanting to reinvent money from this into the product and use that product in other countries. Without some clause, they would be deserving of revenue from other countries because of that. Also, could their selection of my saas be deemed corrupt since they'd own a part of it?

    Anyways, I was just curious. The big meeting is tomorrow so I'll know more after. It's been a tense few days and I'm wholly inexperienced in business having done one deal ever.


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    #4
    antoinolachtnai
    Registered Users Posts: 9,793 ✭✭✭antoinolachtnai


    I just don’t understand what this deal actually is. To the extent that I understand it, it is people taking small shareholdings in your company. I can’t see how this makes much sense for anybody. Who is going to pay the legal fees for this transaction? It is going to involve writing a shareholders agreement as well as a services agreement for your work for them, because this services cash is clearly pivotal to the whole deal. It all sounds very complicated for what might be relatively small money.

    I m not trying to rain on your parade. It sounds like you have done great work with your business. Fair play. But you don’t know much about doing deals. And I suspect maybe your counterparts don’t know much more. Please get some advice and try and sort this out. Please do not depend on it being ‘alright on the night’. This business is your most valuable asset I imagine so take care.


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    #5
    [Deleted User]
    Posts: 17,378 ✭✭✭✭ [Deleted User]


    antoinolachtnai wrote: »
    I just don’t understand what this deal actually is. To the extent that I understand it, it is people taking small shareholdings in your company. I can’t see how this makes much sense for anybody. Who is going to pay the legal fees for this transaction? It is going to involve writing a shareholders agreement as well as a services agreement for your work for them, because this services I clearly pivotal to the whole deal. It all sounds very complicated for what might be relatively small money.

    I m not trying to rain on your parade. It sounds like you have done great work with your business. Fair play. But you don’t know much about doing deals. And I suspect maybe your counterparts don’t know much more. Please get some advice and try and sort this out.

    I agree, to be honest. But the figures are pretty significant.

    I'll follow up later in the week. I wanted feedback before he caught me in a flurry of excitement if the deal goes well tomorrow.

    Instead of being a thankful idiot, I'll bide my time.


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    #6
    rolion
    Closed Accounts Posts: 3,362 ✭✭✭rolion


    Again,same story as last few months ?
    You havent sold yet... !? :)


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    #7
    [Deleted User]
    Posts: 17,378 ✭✭✭✭ [Deleted User]


    rolion wrote: »
    Again,same story as last few months ?
    You havent sold yet... !? :)

    That story was about exclusivity :p Turns out the reason my figure was turned down was this guy having bigger ideas.

    It honestly feels a bit mad that someone left a very good position to pursue this. And 13 others were hired because of it. I'm just a guy sitting on a couch.


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    #8
    Tippex
    Registered Users Posts: 2,918 ✭✭✭Tippex


    Deleted User wrote: »
    A company's owners intending to resell my saas with offline services wants to do a 10% share swap.

    The first deal with a national government whose meeting is next week would be a life-changing monthly for me. Their revenue from it would mostly end in four years. The press releases alone will allow to me expand globally.


    Are there pitfalls to this? I'd rather my business finances be private but I also want my software to be the only one they ever use. There will be other deals so I'm not concerned about the revenue stopping on their end.

    I don't mind dishing out 10% to people who saw potential that I didn't, along with the contacts and experience I lack. They just want to lock in a nice income permanently for what they set up. The 10% I get will be worth less as their revenue stream from each project is temporary. Their shares would be limited to this country's operations.

    I had to read this a couple of time to wrap my head around it.
    Your company is company A his company is company B.
    The owner of company B wants to own 10% of company A and in turn will give 10% of company B to you?

    There are so many things that can go horribly wrong with this. You need to speak to a solicitor. Where is Company B located etc?


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    #9
    StupidLikeAFox
    Registered Users Posts: 7,711 ✭✭✭StupidLikeAFox


    [Deleted User] wrote: »
    That story was about exclusivity :p Turns out the reason my figure was turned down was this guy having bigger ideas.

    It honestly feels a bit mad that someone left a very good position to pursue this. And 13 others were hired because of it. I'm just a guy sitting on a couch.

    I followed the whole last thread and it was very interesting - have to ask what this product is? Seems to be going v well!


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