About kevin kemper Expertise IN my 34 + years with prospective entrepreneurs aged 7 through age 77, in Canada,
Mexico and elsewhere; both directly and through my TV show and newsletter on Entrepreneurship,
have advised on: starting a business, writing a business plan, finding staff, setting compensation
plans, when to joint venture or consider a franchise, have a partnership or corporation structure,
when to start a biz vs buying. Currently tutoring individuals in S. Africa, Bangladesh, India, China, Australia and Brazil. [My incomplete book is entitled Assured Entrepreneurial Success]
Expert: kevin kemper Date: 2/27/2006 Subject: Maintaing management control of start-up
Question Hello,
I am a PhD chemist that has invented a revolutionary new hair care product. I have no formal business training. I am the CEO, President of a company (LLC) that I started 4 years ago. To date, my company is almost through the patent process, and have demonstrated the marketablity of the product through client trials. The product will prove to be a huge moneymaker.
I am planning a meeting with a potential investor group next week to demonstrate the product and discuss financing. I have a thorough business plan prepared that lays out my five year projections. I also have a plan for setting up a manufacturing facility and sales/marketing office. The investors can give 1MM dollars if they like the demonstration of the product.
One of the people helping to facilitate the meeting has just informed me that if we get the financing, then I will not be in an executive manangement positon. People will be appointed to run my company due to my lack of formal business training. I am devestated at the thought of this. Such that I am thinking about calling this meeting off. I know that management people can be put into place to help assure success of the company, but to take over the company seems excessive.
Can a Venture Capitalist insist on taking away the excecutive management power in a company? Do people agree to this? What are some other options?
Thank you for your prompt answer...I am a mental wreck trying to figure a way around this.
Answer a; thanks for writing to me!
b; 602-705-2319 for you; my cell
c; it is very common what is being asked--and you have
some very simple protections that you will "ask" of them
[demand] to make sure NOTHING other than what you want,
occurs to your company!
kkemper1@mindspring.com
waiting to hear from you further.
[you will seek a stipulation that specific methods of
operation are used that you might need and that WHEN
the company reaches 'y' $ net profit, you may take over
as CEO again automatically.
and if anything the temporary CEO does violates your
ethics, rules, .......whatever, that you will layout
in advance, the board is to convene within 72 hours
to hear your complaints.........and under a, b or
c conditions, the CEO is to be dismissed.
