Hi everyone, please I need an experience someone to put me through on sharing equity ratio I received from scale up partner proposal.
My project has been launched in a particular place with staff and developer working in place presently and an interested scale up partner get in touch for expansion of this business to their region with spending analysis from them on how the expansion of the business will be launched in their country where all the expenses will be incured by whoever they contacted to invest in the project.
Meanwhile,after my conviction for the expansion, I have recruited french developers for the immediate work on french version of the app because the app is in english. Below is their equity proposal which I think it does not worth it.
My company : 25%
Scale up partner : 30%
Co-founder. : 45%
Please note, all activities will be carried out in the same office am still using ,with more staff to be recruited.
Pls can I present my own equity sharing ratio
My company : 40 %
Scale up partner :20 %
Co: founder. 40%
This distribution only limited to country of expansion.
Pls I need an accurate sharing ratio before I agree to launched in their country.
The first question is not about the offer, it's why you think you should take on a partner, especially in a country where you aren't...
It can be very exciting to be approached by someone wanting to do business with you, but before you ever consider an offer, you need a clear understanding of whether you're ready to expand or not. Do you have a solid, profitable, stable business in your home turf? Have you seen steady growth? Have you solved the early problems? All of them? Are you in a growth phase where demand is now pushing you to expand, not just looking for more sales? (there's a big difference)
My recommendation is to thank the French people for their interest, but inform them you are not ready to take on a partnership until you have a more mature business. You can stay in-touch, but really, push them off for now.
Imagine the struggles you have working on your local business now, and then magnify them 4x. That's what is likely to happen with a foreign business partner if you don't have a rock-solid, resilient company operating today.
Be careful, and think of the worst consequences of getting this wrong. It'll probably be worse than that.