- Original Poster
- #1
Hello,
This is my first post as i've been reading threads with much interest on this forum and some of the advice is golden. Hopefully someone will emphasize with my position and offer an amicable solution, so here goes...
I set up a company 2 years ago and managed to acquire university grants to build prototypes. A family member then came on board and attended courses on behalf of the company which released monies for a couple of thousand pounds which helped to secure IP.
About a year past and once i got the initial prototype built, the family member was meant to do initial market feedback but declined to do so stating they didn't want to show people a prototype that would look nothing like the end product. I explained that the feedback was important to sense check development but no marketing was ever done. We argue about anything and everything but i do value their input from both attending the courses many moons ago and also knowing they they will relish the opportunity to sell once i have a final pre-production prototype in place.
My question is this, i drew up a preliminary contract between us that was never signed offering quite a large equity for the work to be done. Is there any way i can breakdown the initial equity release into small chunks, to be released as and when future milestones are hit and how is it best to offer this equity? Should i offer redeemable preference shares or redeemable ordinary shares? How will a future investor view this agreement? Can i offer a monetary value to the work done in the past and then offer equity from scratch?
Sorry for the amount of questions but i have run out of money and can't afford to get legal advice. I'll try to get info by having a free half-hour consultation with some local legal companies but would really welcome any advice anyone here may have to offer.
Thanks in advance and i am more than happy to help anyone who may have questions about their own business or just general questions about new product development, as i now feel i can help people not make the same mistakes i have made as it is such a quagmire when starting up, it's enough to put anyone off.
Regards
Anon
This is my first post as i've been reading threads with much interest on this forum and some of the advice is golden. Hopefully someone will emphasize with my position and offer an amicable solution, so here goes...
I set up a company 2 years ago and managed to acquire university grants to build prototypes. A family member then came on board and attended courses on behalf of the company which released monies for a couple of thousand pounds which helped to secure IP.
About a year past and once i got the initial prototype built, the family member was meant to do initial market feedback but declined to do so stating they didn't want to show people a prototype that would look nothing like the end product. I explained that the feedback was important to sense check development but no marketing was ever done. We argue about anything and everything but i do value their input from both attending the courses many moons ago and also knowing they they will relish the opportunity to sell once i have a final pre-production prototype in place.
My question is this, i drew up a preliminary contract between us that was never signed offering quite a large equity for the work to be done. Is there any way i can breakdown the initial equity release into small chunks, to be released as and when future milestones are hit and how is it best to offer this equity? Should i offer redeemable preference shares or redeemable ordinary shares? How will a future investor view this agreement? Can i offer a monetary value to the work done in the past and then offer equity from scratch?
Sorry for the amount of questions but i have run out of money and can't afford to get legal advice. I'll try to get info by having a free half-hour consultation with some local legal companies but would really welcome any advice anyone here may have to offer.
Thanks in advance and i am more than happy to help anyone who may have questions about their own business or just general questions about new product development, as i now feel i can help people not make the same mistakes i have made as it is such a quagmire when starting up, it's enough to put anyone off.
Regards
Anon
