Questions

How do I structure a business where I can market individuals with a skill/trade and small amount of capital?

I want to create business to where I can market individuals that I believe in with a skill/trade with a very small amount of capital. How should i structure this? Example: i start a marketing firm with a few people that know marketing, i give sweat equity to them while our firm makes %20 a year from each individual we are marketing. I feel like equity and percentage is a way to avoid needing large capital up front

3answers

Interesting. I have done this on a couple of occasions, maybe not this exact model but close.

One approach would be a Speakers Bureau. Another would be to structure it as a full service agency or as "full" as your colleagues' backgrounds permit. Be sure to create a vesting schedule, even sweat equity can get away from you if one is not careful (says the voice of experience).

A third option would be an equity crowdfunding startup. indiegogo has partnered with MicroVentures to offer the JOBS Act of 2012 based solution for US based companies.

I would enjoy sharing some war stories or answer any pointed questions at your convenience, let's schedule a time.


Answered 3 years ago

Sounds potentially viable. You've described a way to structure the business in terms of a 20% revenue share. So it looks like you answered your own question.

The real way to test whether your model works is, of course, to try it out. That means (1) finding people whose services you'd like to promote; (2) asking them for feedback on the rev share idea; (3) attempting to market them, as you described. Put it in practice and see.

I know that some people would be curious and potentially willing to give it a shot. For instance, over the years, I have personally offered a 15% referral commission to certain colleagues who might send me a client for custom naming gigs, domain procurement, or other consulting.

That's not too different from your 20% rev share idea. So, depending on how you go about things, the idea might work.


Answered 2 years ago

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