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Business Valuation

Do we need to do a 409A valuation before offering equity to our first employee ?

3

Answers

Humberto Valle

Get Advice On Growing Your Real Estate Business

Not necessarily. As long as you have the stocks to be issued. Have a prior contract agreement between owners of what equity is available, the vesting period. (Some do it on % base points per year, i.e. 50% in year 1 and 50% in year 2, or 1k hours worked) if they walk away in first year they take what has been accumulated. Or is the vesting automatic? - not recommended. LLC, only allow for equal member ownership rights, but and you all save money having bonuses rather than salaries, equity is a good way to offset that as well. So I'm short- there are other factors to consider more than actual valuation which at the end is just a guess since you have no outside investors and large sales (I'm assuming) Offer a %, of the business if is LLC. You could have a limited partnership LLC as well. Or if is a C or S Corp you can definitely offer shares at book value which at this point would probably be in the .00001 or less range per share.

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Gordon Firemark

Media & Entertainment Lawyer, Coach & Entrepreneur

There's no real magic to it. If you, personally, own the show, then you can certainly put together some pitch materials, and "shop" the show around to the major syndicators. See http://www.ranker.com/list/television-syndication-companies/reference You can do this directly, or through an agent. It's often believed that to do this kind of thing at one of the major Television markets, such as NATPE in January (for the US market), and MIPCOM , which occurs in Cannes, France in April (for the international). But you may find that contacting syndicators directly BEFORE the markets, since they're at the markets to SELL the shows in their libraries to the broadcasters. As the Host, however, you may not truly OWN the show, so you'd need the consent/participation of the show owner (likely the TV Station on which your show airs) in order to do this.

Corey Grusden

SaaS Founder (acquired), Investor

The answer -> http://textrhino.tumblr.com/post/19492822693/apportioning-equity-how-we-answer-the-age-old

Josh Rimer

Content Creator / Influencer

Congrats on your steady growth on Twitter and YouTube - that's definitely a good sign that you're on the right track! Sponsorship, brand integration, product placement, reviews, and endorsements are all good ways to make more income with your YouTube videos. Sponsorship would be like a regular, ongoing company that is mentioned at the start and/or end as helping make the video/show possible, brand integration would be making a video based around the company's product or service, product placement would be using the company's product briefly in a video, a review would be sharing your thoughts on the company's product or service, and an endorsement could just be saying at some point that you found a company with a product or service that you like and think your audience would as well. Hope that helps and otherwise if you would like more information on any of those or ways to get companies involved, please feel free to request a call with me!

Arjun Buxi

Executive Coach and Communication Expert

We need to work on MVP and customer validation : how can we make the offering more specific and does this get a positive pickup from potential customers? When I work with my startup clients, we spend an incredible amount of time just summarizing the problem and how you are solving it. This needs clarity of thought as well as some data to back up user sentiment - "do we really need this?" Let's talk about prevalence of letter writing in your country and if assisted or outsourced writing helps your consumer solve a problem.

Chris Remus

I launch, fix and optimize projects and workflows.

I've been a consultant, both independently and through two of the "Big 5" consulting firms, for the majority of my career. I've recently discovered that I have a serious aversion to time-based billing, that's been buried deep down in my subconscious for a while. Because of this discovery, I've been trying hard to break the direct bond between hours worked and income generated. The concept of value-based billing can be very appealing in this regard. The co-founder and CEO of FreshBooks, Mike McDerment, wrote a pretty interesting and entertaining eBook on the subject, called Breaking the Time Barrier - http://www.freshbooks.com/breaking-the-time-barrier It's worth a quick read, if for no other reason than to experience a different way of thinking when it comes to billing for services. Here are some of the stumbling blocks I've experienced, when trying to put value-based billing into practice - 1 - Finding the clients who are willing to take the time to hear you out on the approach 2 - Finding the clients who can appreciate the approach, however if you get through #1, #2 seems to be a bit easier, since their minds are already open enough to consider it 3 - Waiting out the time it takes to find and educate the "right" clients, as Mike describes them in the book, when you have bills to pay :) I do feel that value-based billing makes a lot of sense for both the client and the service provider. One thing that value-based billing does well is resolve the paradox between the client's goal of having a project delivered at a reasonable price and the service provider's goal of generating revenue, which, by nature, are somewhat at odds from the outset, since the client usually wants to pay for the fewest # of hours possible (whether they admit that or not, that's another story), while the service provider wants to put the time in it takes to get the job done right.

terry lewis

Web and Mobile Application Design and Development

From what I have heard from some successful crowd fund raisers. You are better to spend time getting yourself organized before you start your campaign. Make sure you have a least a team of four people and ensure that everyone knows there role and the tasks that they are responsible for.

Jason Lengstorf

Expert in location independence/work-life balance.

The quickest way is to hire a private teacher to work with you hands-on. That's also a little spendy. If you're good at self-motivation, there are thousands of tutorials on various app-building techniques that you can walk through. They exist as articles, videos, interactive projects — there are lots of options. But the most important part of learning any new skill is to build experience. No amount of preparation or study can stand in for solid hours of real experience. You have to start building to start creating the mental models that are required to conceptualize computer programming. And those are kind of like balance, or juggling: they have to be experienced, not learned. I have quite a bit of experience building various software applications, so if you'd like help putting together a DIY curriculum, send me a request for a 15-minute call.

Blake Barnes

Strategic Data-driven Internet Marketing Expert

The short answer is both. As an entrepreneur, 15 year seasoned professional sales consultant for 5 publically traded companies, and digital marketing strategist with Google's only global business partner, I can understand and respect the nature of your question. In the past, before the internet was a medium that the masses used to educate themselves...companies relied on traditional media to drive inquiries to salespeople. Salespeople were trained to overcome objections and close the deal. The message that was oftentimes delivered by the salesperson was inherently influenced by their desire to close business and the consumer knew it. Nowadays, you have an internet educated consumer that has consumed multiple websites and media and if the digital advertising and strategy are delivering the right message, they may not need to actually speak to a salesperson to make a buying decision. Many times people convince themselves without ever even speaking to a sales person, especially if there are 3rd party websites that validate the messaging you're trying to communicate on your own website. Depending on your product or service however, sometimes it is necessary to speak to knowledgeable trusted advisor in order to finalize the transaction and a strong salesperson always pays a company more than he or she is being compensated (hence the math of commission). If you have any follow up questions, please reach out to me and I'd be happy to work with you.

Jeremiah Prummer

eCommerce & SaaS. Doing CRO before CRO was cool.

I have no experience in this other than the fact that I have done some research regarding the launch of a iPhone app for a previous employer. But seeing as no-one has answered yet I thought I'd point you to this: http://advertising.apple.com/promote/ I know nothing about the effectiveness of this platform, but from what I understand Apple will advertise your app to users of other apps. Hopefully that's at least somewhat helpful. :)

Business Strategy

How do I license out a product?

6

Answers

Brad Costanzo

Entrepreneur, Investor & Marketing Expert

So this is a great question and requires a relatively complex answer. And this is NOT legal advice. The first answer is that No, in most cases do not patent the invention yet. Often a provisional patent will do just fine, much cheaper and faster to market. Most inventor patents out of the gate are a waste of time/money. Additionally, one license negotiation piece is that if you have the Prov Patent Application, (PPA) then you can have the licensee pay for the cost of YOUR patent. I recently interviewed licensing expert Stephen Key, NYT Bestselling author of One Simple Idea about this topic. You can listen if you'd like for free here: http://baconwrappedbusiness.com/stephen-key/ Hope this is helpful

Andrés Max

SaaS Founder, Software engineer, UX Designer.

This is a great question and an important one as well. I would start by identifying: Who is your target market? How will they use your product? On the go? On their laptop or on their mobile device? What kind of technology does your product need? Can it be built as a simple website or does in need to be an app (i.e. you need push notifications, integration with other mobile apps, etc). On the other hand, how much time and budget do you have? Typically a responsive website is faster and cheaper to build than an app and will get you out the door faster.

Trishul Patel

Product at Accel

You should leverage angel.co to help you target who to go after.

Jason Kanigan

Business Strategist & Conversion Expert

You'll need to get much more specific. WHO is the audience? WHY would they want these "gadgets"? What problems are you solving, for what audience, that they will pay you to fix? Do you know what size problem warrants your involvement? Honestly, your question is so vague right now it can't clearly be answered. Niche it down. You're matching up a buyer with a seller. Who are these people?

Stoney deGeyter

Author, Speaker, CEO

I don't think you can find a single perfect example because that will be based on that particular company in that particular industry. But what you can do is look for a series of landing page best practices. My book, The Best Damn Web Marketing Checklist, Period! includes many of those best practices that directly affect PPC as well as other areas of marketing. You can also find the free cheat sheet at www.webmarketingchecklist.com. You also might want to check out this article here: http://searchengineland.com/why-my-optimized-landing-pages-trump-your-seo-and-ppc-landing-pages-everytime-167430 as well as the book Landing Page Optimization by Tim Ash.

Kelly Fallis

CEO at RSMuskoka.com

it totally depends on what your site is built in? Let us know

Brian Bemis

Texas Eviction Specialist, Property Management,

Because men think they are experts at everything lol.

Kelly Fallis

CEO at RSMuskoka.com

Given the other discussion about lack of females showing up as experts, perhaps a Ladies Only category might be of interest to some. Throwing it out there #itsachickthing

Pamela Hazelton

Conversions, marketing, ecommerce and content.

Make sure you've setup advanced analytics. You'll get a better picture of which conversions were direct, and which ones were assisted by another channel. Use tags and make sure your urls include all the detailed parameters - note that savvy users might truncate that link, so use a link shortener (like bit.ly) to mask it.

Scott Vedder

Storytelling, Career Transition, & Résumé Expert

We (corporate leaders) should indeed measure contribution but also engagement, innovation, adaptability and growth. Because these are "gray" or "squishy" areas, they're uncomfortable for many managers to use as metrics of performance assessment. Asking leaders who work in a metrics-based environment how they "feel" about someone's intangible skills and abilities is tough and can be uncomfortable. It's also a potentially dangerous area to wade into when it comes to equality of pay, promotions and ratings. Because such a low percentage of leaders are able to effectively evaluate talent, performance metrics serve as a guidepost. The smartest and most innovative leaders and companies can and should see beyond performance and use less easily measurable but more effective indicators of success.

Aaron Sylvan

Consulting CTO • Technical Due Diligence

The application you're describing is probably useful, and can probably be sold... but that's not the question :) The question is what it will cost you to acquire a new customer, and what you can charge that customer. Before actually BUILDING this thing, see if you can get 10 potential customers to at least SAY they're interested. In exchange for their feedback during the development process, offer them free use of the product until it's released, and then for a year thereafter. If you can't close that sale, then either you or your product has a problem. If you CAN get a handful of customers to agree to this "free participation as a development partner" arrangement, then move on to step two: get yourself a HUNDRED signed up. This is a larger number than you can pursue manually, which means you'll have to develop your sales pitch as a landing page on a website, figure out what language will be effective, decide where to advertise, and so forth. Again, if you accomplish this, then you're very well along the way to making this project feasible. But if any part of the above seems impossible, or too expensive, or too confusing or scary, then don't bother wasting your time creating the system. In other words, I'm saying you need to test whether you're capable of building a marketing engine to support the sales of this concept. I *assume* you're capable of creating the underlying product, but that's far from the only challenge. I hope the above was helpful, and of course do feel free to look me up for a call if you'd like to discuss further.

Olga T

Data Mining and Analytics Expert

Hi, I don't have a simple solution that I could suggest to you now. But I have a question for you: if you found a product, that would do that for you (a computer software, that would get all the information/updates from different websites, combine it in one place and optimize for you to absorb) would you buy it? I am a data analyst and my specialty is text analytics. I can take large amounts of text and find some meaning in it. For example, get a set of law documents and programmatically analyze it to build an argument; or I can take pictures of food from someone's instagram account and predict person's weight in 2020. So, I have an idea how to solve a problem like yours. What I can recommend for you right now, is a VA (virtual assistant). I have one myself. She takes care of the information flow. Reading, summarizing, writing lists and notes, making charts, etc. It isn't very expensive, and you can hire some great, highly educated people that are undervalued by an average employer (stay-home moms, fresh grads, people living in remote locations, etc).

Jason Kanigan

Business Strategist & Conversion Expert

Throttle the time in your business and be brutal about saying "No." Be ultra-clear on expectations with every single client. "This is how I work. At X'oclock, I am offline and no longer available. I check emails and messages at these times only: X,Y, and Z o'clock." If that doesn't work for them and they want someone who says "How high?" whenever they say, "Jump!" you say, "No Thanks." But you'll find people like expectations, They like knowing there is a consistent process, an established way of doing things. Also, find people you can trust and delegate to them.

Dirk Ebener

Global business and trade show consulting

Start with allocating about 1-2 hours a day to reach the industry communities you are affiliated with. We recommend to our clients to work on 1) Twitter 2) LinkedIn and 3) Google+. Our research has shown that the reach on Facebook is not as effective as it is on Twitter. We have clients who have a 85% lead finding success on Twitter. You should create content value by sharing this content and your industry knowledge. There are very specific social media campaigns that will drive traffic to your website through social media. You can also look at joining trade show chats and communication platforms there. Attending you industry events, conferences, trade shows, and other multiplier meetings, is a good way to spread the word about you. Each industry is very different and you need to focus on these differences. We are working with clients who are looking to enter the global markets. The approach is different here as well. At the end of the day it all comes down to your willingness to spend time and be creative about the on-line world. I hope this helps to get you started. If you are interested in a more company and products specific session, follow up or schedule a call. Let us know how we can help you.

John Doherty

Founder of Credo, Growth and SEO consultant

Some of these have been said already, but I think there are a number of ways to stand out as a (to this point) not well known professional. This is basically the strategy I put together and followed to get well known as an SEO and now a growth marketer: 1) Teach others. Start by blogging your experiences and showing them what you are learning and how you are doing it. Don't be afraid to admit your mistakes. 2) Give others tools to succeed. When I was blogging at least twice a week on my personal site, I often would create tools in Google Sheets or elsewhere then give them away for free on my site. People love free things. Do you have an email template that converts incredibly well? Share it. 3) Build friendships online. One of the best ways I've had opportunities open up for me is by engaging with the broader digital marketing community online. This really took off once I started blogging a lot, and then by going to conferences and connecting with others (and writing lengthy recaps which I became known for), then I started getting more followers and making more friends. Many of my best friends now I met through the Internet, specifically Twitter. 4) Speak. Whether you are terrified of speaking or love doing it, this is a great way to build your name as an expert. When you speak at conferences (though you should start at meetups in your area if possible), people then often write about it and mention you online, which keeps that flywheel going. But make sure you have an online presence where they can find you (and subscribe to your email list!) 5) Find distribution channels. There are the usual ones of Twitter/Facebook/etc, but platforms like Medium are also amazing for building your brand and reputation. Medium basically has a built-in RSS feed that emails all of your followers when you've published a post. If a post of yours is popular enough (which you can also help along by emailing your friends and asking them to share it), you may have a publication reach out to you asking to republish it. This is a mega win! These are hopefully 5 actionable tips for you. Good luck!

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