the business prenup

we are trying to value our company right now, here is an interesting email about what the heck we are doing and what it all means. things get so complicated so quickly out here in the real world!

Wanted to let you know I met with a man from Park Avenue
Securities last week who will be able to help us construct our operating
agreement after our meeting. They are basically financial business planners
that help small businesses with life insurance, health insurance, liability
insurance, investors, loans, buy-outs, becoming "silent" partner, retiring,
selling the company (we would all have right of first refusal and have to
agree, or would own it with the new owners if one person sold their portion,
as you cannot be forced to give up your share) and valuation (though
obviously he said we can estimate the value pretty easily right now based on
our finances since they aren't complicated yet).

Eventually when we have savings (ha. ha.) then they can help invest it etc
to make sure its not just sitting in a checking account without interest.

Once we have our initial talks about how we want to divide up ownership and
profit/loss sharing of Punkster/Punkster Acoustic we will have a conference
call with him to draft up the contracts. We won't be using him for much more
than advisement until a few years from now when we have actual money that's
being held/saved, but he will definitely be an asset in doing this operating
agreement and also in amending our LLC papers which will have to be done as
well.

I asked him the investor vs loan questions and he said obviously every case
has to be analyzed on its own, but in his experience small bizs often do
best and are happiest when they go the route of third party loans from small
biz institutions (not a bank) and don't give up control of the business to
investors. So he agrees with Donald Trump!! Haha. But then again, we need
to be able to financially back loans with our own assets. We are all in
different financial situations, so that could be an issue. Its like being
married-if we all own equal shares then it defaults to the person with the
least amount of assets/credit. So we want to be aware of that in
structuring. He can help with all of that (either investors or the loans)
but obviously we need to get all of these details ironed out before we put
even more of our own personal finances on the line and also the details of
who is doing what so that everyone is contributing equal time and energy to
make this business successful. As of now, I am uncomfortable with these
details being unaddressed and with the division of labor/responsibility
within the company.

So after the meeting we will have a clearer idea of what everyone is
comfortable with and then can allow him to be the third party to make sure
its all fair. I would like to have all the formal documentation completed
soon after our meeting as I feel it is very important to our growth and to
make sure we are all on the same page.

SOME QUESTIONS TO THINK ABOUT AHEAD OF TIME

1) How would you like to see the ownership of Punkster and Punkster
Acoustic divided? Separate entities or one? Sell-able together or separate?
Does M come in as full partner in both or a majority partner in only
Acoustic? Acoustic is her idea, her development, and her execution, Punkster
is providing the finances to fund her for now and the infrastructure..How
are profits/loss shared?

2) What dollar amount would it take for you to walk away from the
company tomorrow? (buyout) 50K? 100K? 500k? -this number will be revised
within the documents each year as sales grow and it becomes more valuable.

3) If you die, what do you want to happen to your share of the
company?

4) If one partner decides to sell their whole share or part of their
share: Can they sell to anyone they please (thus giving you a new business
partner) or does that person have to be approved? Do you want to be able to
sell to anyone or do you want to have to get approval?

5) What do we do if a partner is not pulling their own weight/decides
not to do work? Should this negatively affect their share of the company?

6) If someone wants to retain ownership of Punkster but has decided to
pursue another career (silent partner/investor), should they have to
contribute a dollar amount each year to retain their current ownership? What
dollar amount? Or will this not be an option and everyone will be required
to be doing Punkster full time/completing their responsibilities or else
will have to allow themselves to be bought out?