Hi,

 

That's always a tough situation. Some quick thoughts are: some states require a 67% minimum ownership stake to sell the company (in the future) without consent from the other shareholders. You need to think about what the company's valuation might be in the future if you bring this person on versus not bringing him/her on. In other words...is it better to own 100% of a company that is worth $500k or is it better to own 60% of a company that is worth $2M?

 

Also, if you do take this person on as a partner please please please be absolutely sure you discusss your exit strategy with them. If you are entering the partnership thinking that you want to keep the business as a cash flow source for the next 10 years and your partner is thinking you will grow the company fast and sell it or take it public in 3 to 5 years then you could have trouble.

 

Good luck! If you 'd like to talk more please email me direct.

 

I think the very first thing you need to reconcile is whether you need a partner or not.  If the partner will add significant value to your business then maybe it's worth pursuing the idea of a partnership or corporation.  Adding signficant value means (and it is not money in this sense) providing the right business direction, strategy, network, expertise and skills that you yourself don't have.  However, if he will just duplicate what you know and what you have, then it is not worth giving up shares.

 

Once you have established that, and if the answer is yes (you need him or a partner), then the next question is, is there an alignment in mission, vision and values?  This is crucial as the first one as you don't want just anyone working with you everyday that you would run in major conflicts.  You can debate and disagree in strategies but not in your long term mission, vision and the values you stand for.

 

If the these 2 acid tests do not pass, then hiring or subcontracting is the best alternative to get the 'same' results for your business.

Some thoughts to ponder:

 

If he is putting cash into the business - he is an investor. You both should be clear on the deal and arrangements.

 

If he is marketing your business as if he is a contractor - then you both need to be clear on the expectations and measurements. If he is getting some ownership for this effort - it should be based upon results.

 

If he is "joining" the company as an active participant (with some ownership position) you'll need to define those "terms" and expectations.

 

Sounds like you've got all three in play - so an agreement could be complex.

 

If you'd like to discuss the specifics of your situation send me a PM.

 

"IT has a lot of value but I am a very "to the point" type of person and have a hard time creating value when I am pitching a product or service."

 

This statement told me a lot! My take is that you are struggling with the difference between marketing and sales. You may not need a partner or salesman, you need better marketing and the sales will come more easily. Marketing is all about creating the perception of value in your product or service...Value Proposition. Though I don't know enough about your company, I would suggest trying a marketing consultant who can also implement the marketing collateral that will make your job of selling easier. Then, if you don't get the results as fast as you would like, adding another salesperson will be easier, less costly than a partner and will accelerate your results to the bottom line.