How to split shares of a company

Possible Duplicate: Forming a new software startup, how do I allocate ownership fairly? How to Divide Up Your Company's Equity

We are three people who want to embark on a new venture.

I've been branding my trading company before they come along. And I have successfully brought in a company that's willing to trade in with me so I can sell their product. My customer is government and they would need to buy these products from me because I am the only darn representative. I am seeking another representation at the moment which will have same affect.

One of the people who want to come in works for the government and know a different company who can potentially let us to represent them in front the government. He has no business experience and can't even right a business proposal. But he knows the right contact at that company.

The third person, only got money. He can write cheques for half a mil or even more to finance the PO from the government so we can go and buy spare parts from the original manufacturer.

I don't believe I need a financier. Because once I get the original manufacturer's representation then all they need to do is to hold safety stock in my warehouse (warehousing is provided through a third party logistics). Upon receiving a PO, I will pull and ship. Then get my money from the government in 30 days and I pay the original manufacturer few weeks after (let's say within 45 days). It's inventory consignment concept (VMI).

Now, how to valuate my company?
How to split shares?

Partnership Shares

asked Jan 8 '12 at 23:37
1 point
  • Welcome to the site. There are heaps of answers to this question already. Have a search and you will find the information you need – Susan Jones 11 years ago

1 Answer


Hmmm... why do you need the 3rd guy? Can't you get a loan from the bank since this is guaranteed income? You could even borrow money from friends and family for the same reason, i.e. this isn't a loan, but guaranteed income. You could pay them back with a small interest as well. My point is that if your client is the government, the risk here is zero (unless we're talking about the Greeks here).

The 2nd guy is also questionable. So you have to give up a part of your company because he has a contact? Very odd and sounds quite unnecessary. Once again, because this is the government, there must be a way for you to get in touch with the necessary contacts directly. I'd say that you need to put in your research and figure out how you're going to do this. This shouldn't be too difficult because, as you say, the scenario is:

  1. The govt needs these parts
  2. You're the only representative.

Unless we're all missing pieces of the picture and you'll then need to figure out how to make this work.

answered Jan 9 '12 at 00:24
215 points
  • That's what I've been telling the second guy that we don't need a financier but his fear is "what if we don't get representation" or "what if they ask us to pay for inventory". I think the probability is low. – User15485 11 years ago

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Partnership Shares