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Hello, my name isXXXXX will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for. what is your view of the company? How much capital does it have. I will be back in half hour.
In viewing the business plan of the company, there is approx 400K. with potential of competing globally.
Only you can evaluate the potential of the company. However, there are some other things of which you should be aware. If you are putting up $50,000 and receive 10% they would be valuing the company currently at about $450,000. Since your $50,000 would entitle you to 10% immediately for what reason does it only buy you 5% the first year? What happens if you leave after one or two years, do you get your money back or do you remain a shareholder? Is there a shareholder agreement that governs the operation of the company? If so what are its terms? Do you have an employment contract or are you an employee at will? An employee at will can be terminated at any time with or without cause. If you were not working for this company would you invest in it? If not you would want protections in your employment contract that you could only be terminated for cause. These are the issues that need to be considered. With these things in mind do you have specific questions I can help you with?
Your answer was very helpful for the hugh decision I will make. The company is valued at approx. 1 to 2M. I have been involved mostly as an advisor. It does need a skill set such as mine to go to the next level. Should I wait until company has signed contract.
yes, an agreement that the product has been purchased.
I need to have a contract, so decided to meet with an attorney next week. The information you provided will be helpful for me to reference during the meeting. The contract will address the 10% stock, the base salary as a consulting COO, the cost and method of payment of my share, protection of my investment of 10% if I depart early, being terminated for cause, this what I remember from your advise.