Hello, I came up with a business idea. I found an investor/partner who will finance the business. His role will be passive. Though, it's not necessary as this is a tech start up, but we agreed that one of us should learn the "trade". This will provide better insight for running things. The budget for the business could be up to N1 million. My business partner is a very busy professional and I am currently unemployed. I have about 3 degrees but you know how naija job wahala is. I will do the field work and I agreed to dedicate 6 months to learn this trade. I am paying for this training. There's an opportunity cost for me too. If I was not doing this training, there are other businesses i can spend my time on that i can make money from. I am not overly optimistic nor idealistic about turnover or profits yet. I just want to provide something of value first, hustle for clients, get organic traffic and wait for the laws of demand and supply determine our fate. I have discussed this with him. We both agreed that this is not a money doubling venture. He fully understands the risks and potential rewards. We're both reluctant to discuss ownership. We haven't been able to agree on a fair equity and profit sharing ratio. I want to have majority. 30% is the highest I can give him. He's (seemingly) an honest man but I don't want to feel cheated in future.

Advice me. Seun and Mods please help me take this to fp. Thanks.

What is the total initial capital required to start the business? How much will it cost you to undertake training which will be borne by you? These figures will guide our advice to you.

sholatech:
What is the total initial capital required to start the business? How much will it cost you to undertake training which will be borne by you? These figures will guide our advice to you.

Hello sholatech, thanks for your comment. Initial capital required will be 400,000 naira. This will be to pay a developer and advertising. It will cost me 50,000 to undertake the training. There are other places that charge up to 300,000 for this training. I will have to dedicate my full attention to the training. I will resume 8 am and close 6 pm. It will include weekends. I have a few business that will suffer because of this, though this is a potentially worthwhile sacrifice.

OvaSabi1:


Hello sholatech, thanks for your comment. Initial capital required will be 400,000 naira. This will be to pay a developer and advertising. It will cost me 50,000 to undertake the training. There are other places that charge up to 300,000 for this training. I will have to dedicate my full attention to the training. I will resume 8 am and close 6 pm. It will include weekends. I have a few business that will suffer because of this, though this is a potentially worthwhile sacrifice.

Still not clear. Let me assume your total capital needed is 1.5m. Your financial brings 1m and you training and logistics estimated at 500k borne by you.

I will first apportion 10 percent as your sweat equity capital, your financial investor techical gets 60 percent based on his 1m contributed out of 1.5m required. You get 30 percent for your train contribution and 10 percent equity for your idea making total 40 percent to you.

But in negotiating, offer him 40 percent while you take 60 percent.