Wenn jemand Firmenanteile von dir will

0:00A lot of people are like, can I have equity? Right? The thing is is like they ask that but they just cuz they don't know how to ask which is like I can't even give you equity because then we have to value the company and then you have to pay taxes on something you didn't receive money for. So, you probably don't want that. And so, what you really want is there's four things that are involved in equity. There's risk. There's decision-making power {slash} control, right? There's profit sharing.

0:27And then there's equity value or sale value, right? And so, when you point this out it's like, hey so how much risk do you want to take on? Like if we lose money, do you want to lose some? And they're like, oh no, I'm I'm good. You're like, okay, so you don't want any of that? Okay, fantastic. Um I'm not going to give you control of the company. So, we're good on that. So, what it sounds like is you really want some profits, you want to be able to participate in cash flow and if we sell, you get some of that. Does that sound right? Great. So, why don't we just solve for that? Right? And so, in the US, are you an LLC or a C corp? Okay.

0:58Well, either way, there's structures for either one. But if you're an LLC, um it's called a profits interest which sounds weird, but um which is not a profit share. It's called a profits interest which is actually um an analog for uh the equity value. But it's basically structured as a sale bonus. So, if we sell, you'll get a bonus equal to this percentage of the company that you have at the point of sale.

1:27So, you're going to get 0.25% per year up to 1% and then after that the whole goal is to grow the company so your 1% is worth more. But the thing is is that for the sales guys, they're like, I have equity. And so, that's a huge huge point uh for those guys. But if they if you do let them go, it comes back to the pool. So, it's only if we sell and you're working for us that you get the get the spiff. You can have it also be that they get profit share equal to their profits interest which would mean they get 1% of profits on top.

1:56>> We both have to mutually agree to let that go for the full term of whatever the other contract is. >> What do you mean? >> Like if they're um lowering the culture and doing things unethically >> No, if you let them go, the profit interest comes right back to you. They don't They don't walk with your company. That's the difference. If you If you give equity, which you can't do anyways, uh doesn't like inheritance and gift bonuses whatever, you can't give people equity. They have to buy equity. So, they would have to write a check to you to get equity in the company. Or you can give it to them and then they pay taxes on the thing they just received for free. Either way they got to They got to write a check.

2:35Right. And so, since we're not doing that cuz they probably don't want to write a check, it's like this gives you all the stuff you want. The only downside of this There's two downsides. The upside [snorts] is they don't have to pay, which is pretty significant. Um the downside um is that it's ordinary income at the time of sale rather than a capital gain. So, they're going to get taxed at 37 rather than 20. So, that's one. Um and the other downside is that if you let them go, they don't have it anymore.

3:03That's the deal. So, but why would you let them go as long as you crush it? And what they would negotiate if they were smart would be what kind of tail is on Because like you don't want to fire fire me right before the deal closes so you don't pay me my 1%. Now, people have this fear, but it's not realistic at all because like if somebody's going to be buying it, if you [ __ ] fire all your sales leaders, that's not a very smart move. Right. >> Real quick, if you are a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift.

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