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Band debt, accounting and taking on new members???


cngracin

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You kind of made a mess of things from the start, & added to the mess as you went. Undoing that is going to be hard, even if you have records of everything taken in, spent, or paid in by anybody.


Another option might be to organize the remaining original members as the "owners" of the band, & treat any new guys as employees (contractors actually; 1099 rather than W-2). Guarantee them a set rate, split, salary, etc. but no share of ownership in the band itself. New guys might get paid more for awhile than the original cast, but if the thing takes off (don't laugh; it happens sometimes!) the owners could come out ahead. It all depends on how much you believe in yourselves, each other, & what you're doing. It could also serve as some extra incentive for the owners to work that much harder, so that they'll start seeing some decent returns.

 

 

Looking at it as a realistic level, we

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I'll tell you what, you want to pursue your logic still...if I was closer, I'd join up and GLADLY take on 1/4 of the debt that the three of you accrued getting that album together (before I was involved). And the three of you take on 3/4 of the debt that I accrued before you were involved.

 

 

I see what you

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I think the OP mentioned that there's not actual debt (like credit cards/loans). Simply that the members have all spent money (gear, recording?) and one member has spent more.

 

 

On gear, I recommend each member own their own gear that gets used. makes exit plan easier (and the guy who owns the PA bails, then somebody else buys one)

 

For money spent, treat that as equity in the company. more money spent on band commands a greater share on the profits that money was spent on.

 

If the money was all spent on recording, then that's where the profits go. it's not a pay back concept. It's of the total money invested, if you put in 50% of the equity, you get 50% of the sales.

 

This means the departing member gets his % on album sales, unless you actually buy out his equity and he agrees to it.

 

Since you got a guy leaving, and a guy coming in, you could OFFER to let the new guy buy in, and that money goes to the guy who's leaving (selling shares).

 

In this arrangement, I would seperate album sales from merch and gig pay.

 

Gig pay should be a even shares (as its direct labor based). If somebody in the band is charging for the PA, then obviously that gets a cut as well (like the sound man does).

 

thats my recommendation from a business perspective.

 

I would strongly advise over-investing and creating imbalance in equity. It messes up relationships. One of the guys with less money is going to put in more sweat equity, which will make him feel entitled to more (possibly rightly so).

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