Partnership Deal - Full Brief

Executive Summary

The Opportunity

Join as Head of SEO / Product Director. Train team on proprietary methods. Help scale agency from ~$1.8M to $4M+ revenue. Path to 35% equity ownership.

Current Status

Owner presented formal spreadsheet with specific numbers. Both parties close to deal but negotiating vesting schedule (time-based vs performance-based).

Financial Analysis (From P&L Documents)

Year	Revenue	Net Income	Margin
2021	$1.39M	$552K	39.7%
2022	$2.0M	$814K	40.6%
2023	$2.5M	$336K	13.3%
2024	$1.8M	$38K	2.1%
2025 YTD	$1.37M	$231K	16.9%

                Profit Volatility Warning: Swung from $814K (2022) to $38K (2024). 2025 trending up (~$350K annualized).
            

Latest Offer (Dec 23, 2025)

Their Offer

$5K/month base + 20% profit share on existing (~$6,187/mo) + 30% profit share on upside
Total current: ~$11K/month | At $4M revenue (30% margin): ~$284K/year

Vesting Schedule Proposed

Team trained: 4%
Churn <3% for 6 months + happy clients: 6%
Year 2: 10%
Year 3: 10%
Company passes $4M: 5%

Total path: 35% equity

My Counter Position

$5K/month + 30% profit share (not 20%) → converts to phantom equity → vests to real equity after PERFORMANCE-based KPIs (not time-based)

Key Negotiation Tension

Owner Wants

TIME-BASED vesting (1/3 per year over 3 years)

"What happens if you do the work in 6 months and then you have equity forever but you're doing origami?"

I Want

PERFORMANCE-BASED vesting (hit KPI = vest immediately)

"With profit share, you could get rid of me at any time. I blow up your company and then you don't need me anymore."

Negotiation Timeline (June - Dec 2025)

Date	Key Discussion
Jun 6	Initial partnership discussion
Jun 20	Stage-based approach (1-2-3) introduced
Jul 11	Equity structure, past partner concerns
Jul 18	Personal bonding, alignment on values
Aug 1	Technical SEO issues identified with clients
Aug 8	Major miscommunication clarified ($100K meaning). Financial reality shared.
Sep-Nov	Ongoing discussions, churn metrics, KPI definitions
Dec 5-19	Final push to close, spreadsheet preparation
Dec 23	Formal offer presented with numbers. Vesting schedule main sticking point.

Questions for Chris Moore

Is 30% profit share the right number, or should I push for revenue share instead? P&L shows profit swung from $814K (2022) to $38K (2024) - volatile as hell.
What KPIs for the phantom → real equity conversion? I'm thinking: churn drops below X%, MRR hits $X, or combination. What makes sense?
30-35% equity target - is that reasonable for this structure?
Owner comp caps to protect profit share - do I still need to worry about that once it converts to equity?
Am I solving for my win first here?
Owner is hesitant on equity (bad past experience) - should I use the Catch-22 talk track?
Should I walk if they won't do 30% profit share + equity path?
What would you change about this structure?

Risk Assessment

My Risks

Profit volatility (could earn less)
No protection if fired during profit-share phase
Time-based vesting delays pay if I deliver fast
Owner could inflate salary to reduce profit

Owner Risks

Giving up 35% of company
Past partner trauma (didn't stay engaged)
I could vest and disengage
SBA loan still outstanding

Key Quotes from Negotiations

"I'm not training nobody's team unless it's $100K and a seat at the table." - Me

"The 4% is locked in no matter what." - Owner

"I want to say I own an agency and post about it." - Me

"For me to hand over 20% of the company is $400,000. That's a lot." - Owner

"I move at light speed. When I get full access to everything." - Me

Bottom Line

Both agree on: Goal to scale and exit, my value is real, partnership makes sense, 35% total equity is reasonable if earned.

Gap to close: Vesting structure (time vs performance vs hybrid)