Thursday, April 2, 2015

Corporate Structure



                FIRST MONEY IS LIKE YEAST

I bring $25 million in research value to the table.  I need $5 million and five years to file a broad patent.  First Step:  Set up a corporation with one hundred million shares of Class A voting stock, and one hundred million shares of Class B non-voting stock.

I get 60 million shares of Class A stock, and the original investors of $5 million split 20 million shares of Class A stock in proportion to their investment.  20 million shares of Class A stock, and all of the Class B stock, remain in the corporation.  Original investors of $5 million get 80% of after tax licensing, royalty, or out-right sale revenue, until they get 10x their investment value back.  I get 50 % of the remaining 20%, after taxes, until the original investors receive 10x their investment back, with 10% remaining in the corporation.

After original investors get their 10x back, they then participate in subsequent after tax licensing, royalty, or out-right sale revenues at a 20% rate, proportionally divided.  Once the original investors get their 10x back, I get 60% of any after tax licensing, royalty or out-right sale revenue, and the rest stays in the corporation for use by the corporation and/or distribution to Class B stockholders.  Any subsequent stock sale after the opening round involves Class B stock.

After setting up the corporate structure, the core people necessary to carry out the required tasks must be assembled.  These people include:

Two salaried people.  Myself as CEO of the corporation, is one.  A second person would be an administrative assistant to handle the office work.  Office space would be rented on a monthly basis.  All other work would be sub-contracted out on a fee-for-service basis. 

The necessary areas of focus:

A CPA firm to handle the money and bookkeeping.  All investor funds would go into an escrow account under the control of the CPA, who would disperse the funds as needed by the CEO.  This firm must be selected.

A pharmaceutical patent attorney.  Ki O of Dallas is highly qualified, and I choose him.

Business and contract law attorney to handle general business matters. 
This person needs to be recruited.

A marketing guru to handle the marketing of the patent to pharmaceutical candidates.   This person or firm must also be selected.

I also want to form an Advisory Board to provide seasoned advice in a structured environment.  Advisors would be included as the project proceeds.  Attendees to Advisory Board meetings would receive financial compensation for their time and expertise.

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