How does Dr Dre only own about 25% of Beats when it was built off his name?

[Malik]

These Coli MBAs are dumb as fukk. There is no talking sense to them.

Obviously they don't understand how startups work.

You need money to run a start-up. Most start-ups don't make money. You need venture capital. How are you gonna reimburse the company that invests in your start-up? By giving them stock in your company. Coli MBAs think they gonna get a $500,000 investment for free



You need talented people to build a start-up. Most start-ups don't make money. And the funding you do have is very tight. How will you convince smart people to help you build YOUR company for LESS MONEY when they're smart enough to get a real job making REAL MONEY somewhere else. By giving them stock in your company. Coli MBAs think they're gonna get IT geniuses with 200 certs for $10 an hour while they hoard 95% of the company's stock

 

[HookersandIceCream]

You need money to run a start-up. Most start-ups don't make money. You need venture capital. How are you gonna reimburse the company that invests in your start-up? By giving them stock in your company. Coli MBAs think they gonna get a $500,000 investment for free



You need talented people to build a start-up. Most start-ups don't make money. And the funding you do have is very tight. How will you convince smart people to help you build YOUR company for LESS MONEY when they're smart enough to get a real job making REAL MONEY somewhere else. By giving them stock in your company. Coli MBAs think they're gonna get IT geniuses with 200 certs for $10 an hour while they hoard 95% of the company's stock

These dudes should have been representing Dr.Dre during the buy out.

We can get you 100% of ownership plus 30 billion

Jimmy Iovine standing there like

 

[intruder]

6 Reasons Why Dr. Dre's 'Detox' Album Will Probably Never Come Out | Yahoo Music - Yahoo Music
I know when Apple buys it he's gonna get some serious paper but its fukked up he doesn't own a majority share of a company that is only really relevant because his name was attached to it. Did he own more at one point and just sell down to 25% or something?

Someone still hd to invest the capital to build the damn business. Name alone won't pay the engineers that had to put the product together. He should be happy he got 25% if all he did was add his name. Most people only get 10% for the name sake

 

[2manyFCKNrappers]

25% of an electronic empire is A lot. It's very generous.

 

[Kasino416]

[QUOTE="Kasino416, post: 8400711, member: 3266"]Im really surprised how dumb (too harsh), uninformed, most people are when it comes to business. I highly suggest many of you enrol in an introductory business class at your local college, or surf investopedia for the day.

Co-founders of companies do start off with 100% ownership, however their shares diminish as the venture goes into the rapid growth stage, where cash infusions are critical. Zuckerberg obviously at one point owned the major of FB, but once they got to the rapid growth stage, they traded equity stakes for cash injections to goldman sachs and other high profile investors. Banks won't loan money to risky ventures, especially tech, so, giving up ownership to continue to grow the business. Would you rather have 80% of something worth $1,000,000, or 30% of something worth $10,000,000?

ownership has nothing to do with voting, as the corporate structure of a firm can be created with different share classes. E.g. Frank Stronach, the founder of Magna International, had shares in which each preferred class shared, gave him 10 votes. Therefore, his voting power allowed him to sell common class shares to the public, which still controlling the company.

Some people went as far as to mention Michael Dell and bill Gates ownerships in their respective companies? How do you think they became billionaires? Clearly by selling shares over the decades in which they've been in operations. I can go on, but its pointless

You completely missed what they were trying to say[/QUOTE]

No I didn't. He was essentially saying, how could someone with such a high profile name, put their brand on a products that becomes such a success and only get 25%.

Well, take the Trump Tower Toronto for instance (since its where Im from).

Trump licensed his successful name out to Talon International, the development arm of CDN/Russina billionaire Alex Schnieder's Midland Holdings Ltd., to create the structure. We'll never know how much they pay Trump, but it damn sure was not EQUITY in the tower. The tower sold like hotcakes by differentiating itself from other luxury hotel condos in the city. No different than beats capitalized by using Dre's name to differentiate it from other high quality head phones.

Trump made periodic trips to Toronto to oversee the development and give his stamp of approval as per the contract, much like Dr Dre gave his stamp of approval during the creation of the beats line.

The difference here is, Trump got paid a flat fee - no equity. Dre escaped with 25% equity, while assuming no risk and T/S chose to complain about it. Who do you think was putting up the $$$$ to get endorsements from multi-millionaire athletes like Lebron James. Dre?

 

[Hacksaw Jim Thuggin]

I'm expecting a 10 page thread that ignores this post in favor of smart dumb nikka proselytizing

yep...he knows about as much about earphone manufacturing as george foreman knows about grill manufacture.

 

[KG1]

Andre to Sean

 

[Robbie3000]

I still don't understand how people are throwing salt in the game. Dre is an OG in our culture. I don't like 50, but I have never hated on any of his business moves.

This is a good look for Hip-Hop. that man.

 

[Dameon Farrow]

Only? That's pretty impressive, really. I don't really see how they live up to their price personally but I can't knock a great hustle. They aren't giving these things away and people seem to really like buying them. 25% isn't bad at all all things considered.