Structuring a business relationship

4 Replies

Ok, I have a friend that I am going to "hire" to help out with raising capital and kind of be my wingman. I have a huge problem networking and meeting people but I do not have a problem once I am introduced at making a presentation. And my friend is GREAT at networking and meeting people and making intros for me. So I thought that we could work together.

So my question is this, how should I structure this relationship? Should he be more of an employee? And then what should he be paid? Or a partner and give him _____%?



If you give a percentage of what you guys make, he's more willing to work and you only pay him when he produces. If you pay him a flat hourly fee, he knows his earnings are capped so he has little or no incentive to close deals.

I don't know the guy or his skill set, if you think he could grow your business and grow WITH the business, you should consider a percentage.

@Karma Senge

I wouldn't bring him on as a partner right away. I would pay him a solid hourly rate or salary plus bonus on what he closes. It really depends on what his skill set is and what you can afford based on your current situation and projected earnings. Is this going to be a full time position or part-time? Remember that workers comp and payroll taxes should be accounted for in your budgeting.

Well I do not have the money to support paying him like an employee right off the bat. So I was going to pay him a percentage. I just don't know what a good % would be for that job.

I would be very careful with performance/success based compensation unless your friend has a series 7 license as the proposed scenario quite likely violates securities regulation.

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