There r many ways 2 conduct ur business. Trust is a very important ingredient, and should b valued against the turnover.
The price of a cup of coffee @ the beginning of a business deal does not require collaterals, a final contract does.
Mistrust, which un4tunately is very common in IL, COSTS. Sorry Mordechai, but I know the real estate biz as well.
A rent deal used 2 b quite simple - 12 cheques x 500$ per month, and a note 2 cover reasonable expenses + a cup of coffee, black, small glass, no sugar, GLASNOST. Business were booming, and were easy 2 conduct.
Since some "smart" businessmen invented the "LAMA MA" philosophy which was un4tunately backed up by the courts, a simple 500$ deal has turned in2 KEREN HON SIKUN - a contract as long as ur arm, 2 lawyers, 2 real estate agents, wealthy AREVIM, ARVUT BANKAIT, PIZUI MUSKAM - in short, a 12 x 500$ deal has turned in2 12 x 700$ deal, just 2 ensure the obvious.
Inefficient, fat, bulky mechanism > business is slow, and it can't compete with other venues where trust and commitment r obvious.
Investors take their money elsewhere, cuz keeping the client 2 a contract is simply 2 expensive.
Much like the music business, the "No FRIER" attitude has yielded a circle of stupid bastards cheating each other. THE REAL, MONEY YIELDING BUSINESS IS ALREADY SOMEWHERE ELSE, but they're 2 stupid 2 figure it out.
This attitude is encouraged by all the auxiliary factors - banks, lawyers and middlemen - cuz that's how they make their living.
But @ the end of the day, the expenses r deducted from the turnover, and every1 loses.
As "smart" as U may think U r(Akol Adom, Not Mordechai), the other party has met its share of "smarties", and will protect itself accordingly. If not - then they r either bad businessmen or "smarties" - and I advise U 2 avoid both.
Dodge trust it will cost BOTH of U, and take ur business down the drain.
Identify ur partners, 2 make sure they won't cost U @ the end.
Negotiate well, and reach a clear and short contract. Estimate the risk, and try 2 generate as little risk as possible urself.
* - Say what U think when it's relevant and contributing 2 the deal, shut up when it's not.
* - Write down anything both sides r willing 2 commit 2, avoid what they don't.
*- Sign the contract with intent.
*- Learn ur partners, the deal and law well, and U won't b surprised.
-------------------------------------------------------------------------------------------
| ציטוט: |
| אין כמו כסף ביד על מה שנעשה |
Or 2 paraphrase -
| ציטוט: |
| נעשה ביד - אין כסף |
The key 2 this deal is "Who is the manager of funds = producer (not "musical")". Each party brings its investment in2 the deal, some bring money, some bring work, some bring talent, some bring all 3.
1st all parties must agree on this issue:
The investor's role may b the bank, or the producer. If the deal is urs, then he's the bank, and his investment should b considered as a loan, and he'll b rewarded accordingly.
If the deal is his, ur work and talent will b considered as an expense, and should b rewarded accordingly.
The price of money is known, more or less - so U need 2 put a price on ur talent and work, and so should the per4mer, and every1 involved with sharing the profits.
Down payments will b deducted from that price, and in the end U'll end up with a list of sums, the "ingredients" of the deal.
A realistic prediction of possible income must b made. A decision of the assets 4 sharing must b made - is it only the selling of albums revenues, or copyright royalties, per4mance rights and revenues, commercials revenues etc. as well.
Then each party may calculate its own risk + MONITIN value, and include these in the final price.
4 example:
The album is predicted 2 sell 20,000 copies, @ 10 shekels profit / copy, over a year. Other revenues r not shared.
Total profit - 200,000 shekels.
A middle level yet bright and upcoming engineer is offered a piece of the action. He normally charges 20$ / hr, and his schedule is only 60% full. He's in need of a bigtime success, that may boost both his price and his schedule.
The deal offered will require 200 hrs, and will fill his schedule 2 80%. On a free time basis, if it does not take him away from his other jobs, he may drop the price down 2 15$ / hr.
He believes the album will sell as predicted or more, and expenses r calculated well. He TRUSTS his partners, and believes the work will b completed in time, but there will b additional expenses of 50,000 NIS, bringing down the profit 2 150,000 NIS.
No risk - 200 x 15 = 3K$.
50% risk - 1.5k$ cash, + 1.5k$ royalties.
1.5K$ = 6.75kNIS.
Over a year = 6.75 * 1.05 =~ 7.1kNIS.
7.1k / 150k =~ 4.7%.
Now he calculates the risk and MONITIN - The album may sell more than predicted, and success will bring in more work and price.
He may settle 4 3%.
On the other hand, if he estimates that the album is over rated, the producer will work 4 more than 400 hrs, he'll have 2 stare @ the autotune screen 4 weeks lis10ing 2 unidentified screams, and getting his money will require the help of the CIA & the BABA SALI, he'll boost his share up 2 10%, or drop the deal altogether.
--------------------------------------------------------------------------------------------------------------------------------
In short, U need 2 make a business plan, or have some1 make it 4 U. If ur investor is a serious businessman, he'll b expecting it.
U may also let him know what the expenses r, and ask him 2 make U an offer U can negotiate.
I've written only the general outlines, there r more issues 2 b considered, as record labels have proven time an again :-).
Read here 4 ex. : http://www.negativland.com/albini.html
If the money is big and the risk may b high - have a lawyer look in2 it.
Peace,
Zooot 
המגזין הישראלי לטכנולוגיות באודיו ומוסיקה
Musical Act Magazine
פורסם: ראשון 31 אוק',04 00:28
