Hello ladies and gents, I own a start-up that has been running for a year and I need some much need advice from brilliant minded entrepreneur's like yourselves! Currently, my company is undergoing a complete overhaul. We are in the middle of negotiating a contract with a local marketing firm (lets call them company "X") that will rebrand my company and take care of all PR. Company "X" has a proven success in my area but I want to make sure I am doing the right thing (my gut feeling says no, which is why I am seeking advice). As everyone very well knows, start-ups do not have a lot of operating capitol, so I am negotiating equity in my company. Here is the proposal of what it will all look like once the deal is done. Please notice the compensation structure in red. The biggest issue that I have is the 10% net profit splits. As a start up we need as much cash as possible to gain traction. What are some alternatives that you all can come up with? Is this a bad deal? NEED HELP! Thank you everyone! Your help is much appreciated! STATEMENT OF SERVICES Professional Services: Marketing Support, Brand Identity Development (ex. Logo, color palette, etc.) and Public Relations Support Invoice Terms: Due on Receipt Term: May 1, 2013 – April 30, 2015 Services:* April/May Perform Limited Competitive Marketing Analysis Identify 3 Competitors to review. The review will include but not be limited to the following 1. Name and trademarks 2. Marketing messages and positioning statements 3. Business segments and offerings 4. Colors, logos, websites, etc. Obtain insight into business segment and understand Trep117 value proposition in the marketplace Create Name for NewCo Internal brainstorm sessions to review Competitive analysis Brainstorm 5 possible names Limited trademark search for selected names Present potential names to client for final selection May Design brand identity for the new name selected Meet with Trep117 Execs and select 1 name Select color palette Design 3 logo concepts to support selected name 1. 2 rounds of revisions 2. 1 design to final Develop Messaging B2B Messaging and Platform Development B2C Messaging and Platform Development June Web site design Home page Internal page design 1. Assist with overall site plan development 2. Assist with copywriting 3 design versions for website, 1 version to final Coding not included 1. Company "X" will work with Trep117 to select web firm 2. Company "X" will work with Trep117 to coordinate coding and testing of web front end with back end Assist in developing timeline to roll out B2B and B2C functionality Design Business Cards and Letterhead, 3 concepts, 1 to final Design 1 page product/business sheet July – Dec 2013 Ongoing Support: Public Relations Develop Public Relations Strategy for Trep117 to communicate its unique value proposition and core offerings to current and potential customers Develop target list of media outlets including trade, business, consumer focused outlets (up to 50) Maintain database of key media contacts and work to foster relationships on behalf of Trep117 1. Provide proactive and reactive media relations support 1.1. Field and filter any calls from media and facilitate interviews 2. Craft and pitch press releases promoting various topics (as needed) Marketing 90-Day Plan development and activation Company "X" to work in 90-Day plan increments outlining areas of focus for marketing and PR support for Trep117 Work with Trep117 to identify business needs/objectives for each period Example- B2B initiative push for Q3 to generate high yield transactions Re-group after 90-day period to assess performance, adjust strategies, etc. for the next 90-day period Monthly results reporting, 6-month and year-end assessments Ongoing Strategic Counsel As needed and available 2014/15 Planning and Execution TBD Company "X" Fees:* 5 % Equity Stake in Trep117 (Non-Dilutable) 10% of Net profit on each unit, after 100 units/month for Period of contract and 120 days following expiration of this agreement Trep117 shall pay Company "X" monthly, 30 days after the end of each month. Trep117 shall maintain records of transactions covered by this Agreement for two* (2) years from the date of such transaction. On reasonable notice and not more frequently than once each 6 months, Trep117 will provide Company "X" and its representatives access to such financial records and supporting documentation as may be reasonably requested by Company "X" to support Trep117's reported revenues covered by this Agreement and to document any deductions.** Company "X" agrees to schedule its audit so as not to conflict with Trep117's normal accounting audits. Company "X" does not disclose any contact information for 3rd party promotional partners, marketing databases, etc. delivered to or used as part of any client marketing campaign. This proposal is valid for 15 days from Agreement date and is non-cancellable after agreement is signed. Travel and other Out of Pocket Expenses (ie. Production, Fulfillment, Mailing Lists, images, etc.) are not included in fee. 15% Processing fee will be added to expenses incurred on behalf of client and initially paid by Company "X".