From: Ellen K. 

That was a lot of very good free advice.   I hope some of the folks who
like to beat you up were paying attention.

On Fri, 24 Mar 2006 11:44:10 -0500, "Gary Britt"
 wrote in message :

>Congrats and good luck.
>
>What's the present value of the reasonably anticipated net profits over the
>next ten years, and what's the probability of achieving those results?  That
>will give you an idea as to value .  What's the value of your
>services and time to produce the product and get it ready to ship?  That
>will give you an idea of the amount of dollars you are putting into the deal
>versus the investor?
>
>Tony is right about getting a good business lawyer to help you on this.  You
>need to make sure you understand who owns the IP rights, including the
>rights to commercialize the work in future endeavors, right to source code,
>right to license the property, IP, etc. to others, right to control
>derivative works, etc.  You also need to watch who is going to be head of
>company with right to hire and fire and make ultimate management decisions.
>The form of the company, corporation, partnership, other type of entity, can
>affect these various rights and obligations.  You may need an employment
>contract with the company, that may or may not need to be guaranteed by the
>investor.  You need to watch how and to whom stock options or other optional
>ownership rights are handled.  Preemptive rights (i.e., the right to
>maintain your same ownership percentage as new stock/investors are brought
>into the deal in the future) need to be considered.  If you aren't in
>control of the entity and the entity offers new stock/ownership interests,
>even if they have to offer the new interests to you first, will you have the
>money to buy?  If you don't, after going through the motions of offering to
>you first they can sell to themselves or others, effectively diluting down
>your ownership percentage.  What are the applicable rules concerning a
>merger of the company with another company going to be?  What about a sale
>of all or substantially all of its assets to another company, what then?
>
>I could write many pages about all this.  Best thing is to get a qualified
>business lawyer to help you.
>
>Good luck,
>
>Gary
>
>"Antti Kurenniemi"  wrote
in message
>news:4422de95$1{at}w3....
>> Today I just got offered a considerable (well for me anyway) sum of money,
>> to fund my software business. Wowzat, that's cool! I've been battling to
>> finance my development (I'm doing a small-business crm/time
>> planning/invoicing/whatnot type of application) by doing support gigs and
>> all sorts of odd jobs, and this would really make all the difference in
>the
>> world. I'm so excited that I can hardly stand (or sit) still.
>>
>> Anyone have any hints / ideas how to value a software (business) before it
>> sells anything? I'm left with a decision: I have to offer a percentage of
>my
>> company to the investor, and I haven't got a faintest clue as to how big a
>> slice I should offer - too big and I'll regret it for the rest of my life,
>> too small and they'll just shoot off leaving me empty handed... Damn, why
>> aren't cool things ever easy . Well, no worries, I'm
pretty sure I can
>> trick them into telling me what they have in mind, and then I'll just
>divide
>> that by two, and that should be about right.
>>
>> Wopee! Beers are on me the next time you're hereabout!
>>
>>
>> Antti Kurenniemi
>>
>>
>

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