If you are going to start a small business, ownership is typically the result of some company stock purchase. Whoever puts in the money, gets the ownership. The people with the money are taking all lthe risk. 99% chance that this business doesn t last a year and the people p[utting up the cash lose it all. That said, if you are doing the work, you are bringing something to the table. I think you re dreaming if you think that the fiance should have 33%, when she is putting up no money and doing bookkeeping. Get real. Here s what I would do...Sister/Brother-in-law - 100% initially. (They are taking all of the risk, you are taking none)You/fiance - 0% (your time is not worth that much)You take 33% of profits initially. Notice, I said profits, not revenue. When your 33% of profits equals $4000, you buy half of the business from your Sister/Brother-in-law. In my mind, the fiance will be with you and you re ownership intererest is community property. If for some reason, it doesn t work out with the two of you, she will hit the road, and you can find an accounting firm. When you own 50% of the business, you can take 50% of profits. It would probably also be fair to get some sort of commision on top, but that s something to negotiate with the sister/brother-in-law. Have fun.
You need to project realistic cash flow so that you have an idea of what kind of profits are going to be coming in. Arrange the percentages so that the financier (your in-laws) have a realistic hope of recouping their investment within 5 years or less. You and your fiancee split the rest. You may want to put in some options to give you the opportunity to buy more equity later, after you ve saved up some money.
Think of it this way they have all the money invested so they re feeding the company while your working with it, technically without them there is no company, without you theres a company, except it does nothing. So 25% each (or 50% to them) seems fair to me.
give them 50% of the profit until they recieve 150% of their initial investment.
more than others
With the information you have given, I would say is your Sister and her husband own the business 100%. Do you bring any skill that only you can provide? Do you have a patent in your name that is part of the business? Did you have an arrangement when you started that you would have an equity position in the company? Does everyone draw a salary? How and when will the start-up money be repaid? Unless you agreed in the beginning that your work effort would somehow be compensated for by something other than a paycheck I think you need to do that now. Remember that unless you can get the money somewhere else you really have no bargaining leverage.
