Its about sharing a business. Here is the scenario:
Person A, an inventor, worked for 20 odd years on a new "industrial
devise" for lack of a better description. He has spend perhaps 10,000 – 15,000 hours
or more and given all his spare time and in later years his full time in its
development.
Person A meets person B, a sales man, who finds person C, a
manufacturer that can use that product of inventor A.
Person C agrees to try a prototype. Person A works for now 1
½ years designing a specifically requested size to meet the manufacturers needs.
Person B and C agree to contribute each $ 10,000, Person A
says he pays at least that or more if cost rise above 30,000. Person A has
spent already ~ $ 9000 for a draftsperson during the last year.
Person B also finds a manufacturing firm to do most of the machining.
Person B now proposes to create a firm, each providing $ 10,000
for initial capital of 30,000. Fabrication costs of all parts are in the range
of 30,000 plus ~ 10,000 for the draftsperson using SW already spend.
"B" now suggests for an even 1/3 ownership for each A, B and
C and to share losses and profits equally at 1/3.
Would that be fair? "A" has spent an enormous amount of
effort and some money to come thus far to be at a stage that a prototype could
be build and tested. "B" really has only made contacts so far. What would be a
fair proportion of ownership?
Any suggestions will be welcome. Thanks.
5
Fairness and Setting Up a Business
Re: Fairness in business set up
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