Forums: Discussions for entrepreneurs and small business.

Hey friends!

First and foremost, I just want to announce that my business is registered and official! I know that for all you entrepreneurs out there, it`s a bit of a milestone to get that. It feels good.

Anyway, I`m putting together a board of advisors. I know a number of very skilled professionals that I want to be a part of my venture. These are people who have incredible credentials and they would be more than helpful. I took the advice of our startup nation gurus and decided that by offering a tiny stake in the company I could ask for a few hours of each of these individuals` time every month. By doing so, I can be surrounded by their advice, contacts, and potential investment.

My concern is, what happens if things don`t work out and I have debts for a failed business. Are they at all responsible for some of that?


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Collin Cummings
President, Drop Box, LLC
dropboxmail@gmail.com

It depends on how you legally structure their ownership.  They can be silent owners in the company.  I would seek legal advice, and there should be an agreement that is drafted that all of your investors and advisors have to sign acknoledging the risk and their responsabilities if any.

By the way this is not legal advice and I am not lawyer : )

Also, regarding your advisory board another motivational incentive is simply that the worth of their share in your company is only worth as much as they contribute.  So I think that is good that you establish some basic guidelines as to what there responsibilities are but making it clear that the value of their stake in your company is dependant on the success of your company which they contribute to.

 

Good Luck.

I`ve thought about that. Thanks for the "non" advice.. I was just seeking some kind of an answer. I know I need to find a lawyer. It`s just one of those things I need to do.

Thanks again.


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Collin Cummings
President, Drop Box, LLC
dropboxmail@gmail.com

I have a  BOA for my company and they have no ownership what so ever. They are advisors...they provide advice. True, I have befriended them and invest as much as I can into their life as they invest into mine.

As we move forward, I will create a profit sharing program for them so they can atleast recieve a percentage of the profit that their advice helps create.

C.     


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XMG Internet Marketing Group
Making the Web Work
www.xmgonline.com
inbox@xmgonline.com
336.510.9642

Calvin,

That`s a great situation that you are in to have people who are willing to help you without monetary incentive.  I also have an informal BOA that are not paid.  Many of them are honored just that I would ask them to be on my BOA and other than paying for lunch every once in a while I do not pay them at all and they don`t want any money from me.

If in the future I am in a positiont offer them some compensation I will. 

I think that both sides have there advantages and uses.  You can also consider a hybrid situation.  I would definetly try the non payment method first and see how that goes.

Good luck.