I'm in the middle of a discussion with a LOT at stake if I advise my client incorrectly.
Let me explain . . .
I'm working with a client who is almost ready to launch a business that is essentially an online service.
The business is largely built around this client (she's a definite personality!) and the training she offers that consists of live webinars, as well as recorded audio and video support available to her clients through her website.
She's been approached by someone who's offered to be her Chief Operating Officer.
I'm concerned about the terms being offered: 10% of gross revenues and 10% equity that he can demand be cashed out at any time, within 30 days notice. Given that this person is not willing to put any money into the business (so far programming costs are about $70K and not over yet!) and he isn't giving up his other job (as my client did) I am dubious.
But . . . my real question is this: Does such a small firm -- basically the owner and some 1099 vendors -- even need a Chief Operating Officer in the first place?
I'd love to have some thoughtful input from my fellow biznikers on this one!
Thank you in advance.