What's the best compensation structure for a COO who will be on your management team? Hope do you structure the agreement so that incentives and goals are align to grow the company? What are some clauses to protect against downside risk?
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You can search some recent threads on comp (equity vs. profit participation) but I would recommend against equity at the onset or even allowing a buy-in. It creates too many potential conflicts and limits your flexibility to terminate the person if they turn out to lack the skills you require. You can always switch from profit participation to equity down the road.
I strongly recommend Jim Sharpe’s blog. Much of what he writes resonates with me as it relates to search fund targets. What may be standard in a larger PE deal doesn’t translate well to smaller assets.