My name is Andreas Kraemer and I am a founding partner at CENAK Consulting L.P., a boutique investment bank focusing on the needs of early stage growth companies. I have a successful track record of over 16 years in venture capital investing, deal structuring and M&A.
One question we get asked over and over again is how to structure a company initially. There is the question of the legal structure, which I will discuss in a later posting. Many founders ask me what the “right” ownership structure is when two or more partners are involved.
The answer is simple: there is no “right” structure.
There are many factors to consider in structuring a company’s ownership. Financing is just one but certainly an important factor. Other questions to ask are: How much does each team member contribute in sweat equity today and down the road? How do we incentivize people so that they stay with the company long term? What do investors want to see?
One key thing to remember is that greed will not get you there. Too many business ventures with good business models fail because management got greedy. My advice: don’t do it.
These are just a few considerations for an initial ownership structure. The important thing is to get independent opinions, and a good business attorney to document it all.
Do you have a company that requires funding and do you need help from experienced entrepreneurs and investment bankers? Let us help you turn that idea into reality. If you want to be considered as a CENAK Consulting L.P. client submit your information to firstname.lastname@example.org.