Background

There is obviously an inherent need for all companies and organisations to easily record, administer and audit the holiday and sickness records for their employees. However, it is probably fair to say that most companies and organisations do not handle this process as efficiently as they might.
Whilst working in the technical department of a large company, 2 colleagues came to the same opinion and, after some extensive research to see what existing software was already available, decided they could design and write an on-line software application that would greatly help improve the process for most companies.
The result was a formal partnership in the form of a Limited company called Yomita.com and a brilliant piece of software they called Leave Management Service.

A great product, but how can we sell it?

Recognising a need and creating a great product are certainly key elements of the equation, but without a successful sales infrastructure the new venture was unlikely to progress as quickly as the partners would like.
Yomita originally investigated and pursued a sales model based on 3rd party resellers taking on their product as part of an existing portfolio. However, after a few months it became readily apparent that it is often difficult for resellers to a) devote enough resources and b) provide sufficient focus to generate a level of sales that make it worthwhile for both for both parties.
Yomita therefore came to the conclusion that they needed their own in-house sales resource. However, having no experience in recruiting and managing a sales team, this presented another barrier. At this stage the partners were still funding their new venture from the wages of the full-time positions and had insufficient capital to fund the recruitment of an experienced sales manager. They therefore decided to seek additional external investment.
As is perhaps quite common in these situations, a mutual acquaintance led to the introduction of one of the partners to Flaxlands Management and discussions took place as to how Flaxlands Management might provide the investment necessary to create a successful sales function.

The Way Forward

An agreement was reached to form a new joint venture company (Tayomi Software Ltd) with the shares distributed between Yomita Ltd and Flaxlands Management Ltd. A fixed term contract was then drawn up so that Tayomi Software became the exclusive distributor for the Leave Management Service (LMS) software. Sales targets were also agreed as part of the contract.
At the end of the fixed term, if sales targets had been met, the Intellectual Property (IP) for the LMS software would be transferred from Yomita Ltd to Tayomi software Ltd. The new joint venture company would then have the twin foundations of asset ownership along with a growing sales record. However, if sales targets were not met then Yomita could choose to keep ownership of the LMS software and, if they so chose, explore other methods of sales distribution.

In essence the structure of the deal between Yomita and Flaxlands was such that Yomita would relinquish a proportion of the ownership of their asset in return for guaranteed sales revenues. If sales revenues did not hit targets, then Yomita had lost nothing.
To fulfil their part of the deal Flaxlands Management joined forces with an experienced sales professional who was at the point in his career where he was looking to take a higher level of risk in return for an equity stake in an exciting new venture. Flaxlands Management provided the working capital to implement a realistic sales and marketing plan and also provided a significant level of management expertise to monitor and mentor the new company.
Flaxlands Management strongly believe that where partnerships are formed between talented people who inject not only their own expertise but also very high levels of enthusiasm and energy, and concentrate on what they are good at, instead of trying to be a jack of all trades, then startup companies will have a much stronger chance of success