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Could We Create a Business Together?
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We have now followed much the same fate as The Business Experiment.
We need processes (now being discussed by some), teams (with competent, passionate members), and expert leaders. I have now completed the Skills and Interest Survey, and will be contacting all 100 people on the list to see if building teams can jump start all those that said they wanted to participate.
Lessons Learned from The Business Experiment*
CGCreativeGal2006-12-14 0:7:44
The process is still evolving via other threads.
Over Chrismas New Year it kind of stalled but I`m sure will get back on track.
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This appears to be a business (whatever it turns out to be) with no appreciable capital and no immediate revenue stream, so hiring people for salaries in the traditional sense doesn`t seem to be an option. This is a dilemma for many aspiring entrepreneurs - big ideas - no money.
Forming a corporation and the awarding of shares for time and expertise is the one construct that will most likely meet the individuals need for compensation or at least the promise of compensation. It is also about the only way this enterprise will be able to raise the capital it needs for actual cash expenditures, and there will be a need for cash. Even with a "volunteer" writing the articles of incorporation and the bylaws, the State will want its incorporation fees and they prefer cash.
Let me make some assumptions at this point.
It will take $1,000,000 in labor and cash to get this show up and running.
A Corporation will be formed and issue stock with a par value of .10 per share.
There will be 10,000,000 shares
The average value of labor and expertise is $30.00 per hour
For each hour of expended labor the corporation would award 300 shares of stock.
For each $100 in cash invested there would be 1,000 shares awarded.
Interested SUN members could subscribe to an initial x number of shares. IE: Joe Graphic Artist will subscribe for 30,000 shares. He is then committed to provide 100 hours of graphics work within x amount of time. Upon completion of the agreed upon work the shares would be issued.
A list of individuals which would be willing to subscribe for shares would be formed.
An election would be held to decide who will be on the board of directors. 1 vote per share to which the individual subscribed. Only those that initially subscribe would be allowed to participate in the vote. (this forces a committment from the SUN membership that is interested)
After the initial subscription process and the voting in of a board, tbe number of shares awarded for an hour of labor would be negotiable and determined by the board or its representatives. This will allow for variances in the value of expertise and labor.
Okay.... I`ve put in my two cents worth.... I`d like my 1/5th of a share of stock please.
Entrepreneurs MUST BE self-driven and self motiviated.
And it`s not unusual for that "team" of entrepreneurs to have an agreement between themselves as to what their share of the rewards will be when their efforts pay off.
Not all capital is in the form of cash..... money can be had in nearly infinite quantities but time... now that`s something that is only available to people in a finite quantity... one lifetime per person.
Participation in any of these projects requires the individual to assess the opportunity cost. They have a finite amount of time available to them and as it stands currently, they have no idea as to how their investment of time into one of these projects might pay off in terms of ownership. We all know there is a risk that the business might never make a profit... but at least you`d know what your percentage of the goose egg was.
It is not uncommon for people to get involved in projects, spend an enormous amount of time and effort only to be thanked for their contribution and told to "contact an attorney" if you want to be compensated for your efforts.
At least one of the projects has piqued my interest but my participation will be dependent upon a concrete methodology for assigning value to the time it would require of me. Until that happens it is difficult if not impossible to do a valid assessment of the opportunity costs. Pokerman2007-1-9 19:10:17
The bottom line here is that we`re supposed to be entrepreneurs. This isn`t about finding a "job". The whole idea here was to see if people could pool their talents in pursuit of a common vision to create a successful company and to ultimately prosper through the value of the equity.
If people can`t see it that way, it will never happen....
So, like-minded people who do see it that way, and who do have complimentary and critical skills to bring the table should get together and make something happen...
If you don`t get started soon, I`m going to have to jump in and push you all along!! Just kidding of course....but come on....the time is now!
Jeff
Hi Stephane...Happy New Year!
So help me out on this compensation issue- Mike....Pokerman.....Jeff, anyone. When during the planning stage should this be addressed? And, with the recent changes in financial accounting rules and the IRS` increased focus on valuation of private company stock....... is it already time to consult the accountants prior to getting too far along in the planning stage? Would an accountant determine the compensation method?
I always think it is important to start a business using experts like lawyers and accountants. However there is a distinction here that is important. When awarding "founders equity", the tax issues are not relevant. Equity in the company gets divided up amongst those who will contribute prior to the launch of the company.
There is nothing wrong either to plan for salaries once the company is funded, but seeing this first as an entrepreneur to participate in the equity of the company is the way this has to be considered....
Jeff
Some form of agreement along the above lines would make me happy.... as far as initial equity division methodology goes. In a previous post I outlined some assumptions that could be used as a starting point to get this ball rolling.
I would assume that there is a coporate lawyer somewhere in the house that could put this into writing for x number of shares at x cents a share in exchange for his input.
I will then further assume that there might be some individual that might be willing to pony up the x$$ for the corporate filing fees for x number of shares at x cents per share ..... so on and so forth.
In the e-learning project one of the first modules could be "How to turn a communal project into a capitalist reality - A solution for equity division" on demand download just $49.95.
The problems this group needs to overcome and the solutions we develop have value because if we have an issue, others are facing the same issues when they attempt to transition their ideas from dreams into reality.Pokerman2007-1-10 11:47:8
I agree we should use this thread until our secure communication structure is agreed upon or created.
Michael T; I agree that our infrastructure should be created first and this could possible be our biggest asset.
Also, should we cap projects at 100 200 or 300 participants?
Our overall company could have (A) shares and each project created could have a separate (B) share holders. A percentage of shares from projects could go to our parent company for all share holders.
Lets get our communications system sorted so we can communicate and all have a say in what is happening and not have to hold back information.