Iron Gate Plan 2026 (Draft)

• Updated 30 Jan 2026, 13:48
  Las Vegas, NV

This plan details the key activities the company will undertake in 2026.

Operating Agreement

WIP— Colin to further outline specifics in this section for legal review.

The Operating Agreement will secure the partners' individual and collective interests as well as prepare the company for an eventual acquisition. The target execution date for the Agreement will be April 1, 2026.

Among other details, the Operating Agreement will specify—

• Registration— move to Nevada;
  • Bill Larson suggests we formally move the company registration from Washington to Nevada to avoid potentially worsening conditions for businesses in Washington State. This should occur in tandem with the Operating Agreement draft to avoid an unnecessary amendment after the move.
• Management structure;
  • Member managed;
  • Approval of majority of the partners on any transaction outside the regular course of business over $1000.
• Voting requirements for various business activities;
  • For simplicity recommend simple majority for all activities, including approval for distributions.
• Drag-along (majority vote requirement for sale of the company);
• Buy/sell agreement;
  • Should the partners agree the Agreement can specify a simple buy/sell price calculated at 10x ARR company valuation.
  • Buy/sell can occur based on either majority vote or super-majority (60%? 70%?) vote.
  • Buybacks are structured as purchases, using company cash to pay the seller for the units, with the cash being reported as distributions to the partners on K1s, and the units being re-distributed to the remaining partners proportionally. However, at buy time a different method can be elected by a vote of the partners based on CPA advisory.
• Payments to PNDLM for services through 2025;
  • In the event the company sells for $10M or more, the company will pay PNDLM $1M for services provided through 2025.
• Payments to PNDLM for services starting in 2026;
  • PNDLM will publish a reduced rate table based on its actual employee salary and benefits cost, plus 30% administrative overhead fee.
  • PNDLM and the partners will agree to a budget for PNDLM services on a monthly basis. PNDLM will only be permitted to exceed the budget with the approval of the partners.
  • PNDLM will invoice for services provided, and Iron Gate will pay for the services out of available cash flow.
  • Any amounts unpaid by the due date will automatically accrue a 20% investment risk fee.
  • The partners will not unreasonably hold PNDLM fees from being paid with available cash flow.
• Distributions;
  • Each month, Iron Gate accountants will assess the financial situation and propose an amount which will be distributed proportionally to the partners.
• Profits interest plan;
  • Create hurdle with 30% of sale upside over $4M of valuation made available to Jacob, Audrey, and Bill Yè (split TBD).
• Other typical clauses as may be suggested by counsel.

Buy Sell Memorandum

Our CPA has advised us to draft a single memorandum in the Operating Agreement detailing all changes to the ownership table over time including Bonnie Adams grant #1, Matt Janik buyback #1, Audrey Kangas grant #1, Bonnie Adams buyback #1, Matt Janik buyback #2, in order to codify a final ownership table.

Key Feature Development

Bill Yè is currently product managing an effort to fix key shortcomings in the platform with the goal of retaining Orion and making the platform significantly more attractive to prospects. Jake Ferrin is further outlining key AI-enabled features for the platform that have been shown to generate significant revenue when applied in other industries.

The partners are encouraged to attend twice-weekly "sprint" meetings on Tuesday and Friday wherein all product development priorities are openly discussed and work-in-progress is assessed.

Marketing Plan

Once some key development on the platform has been completed, and assuming there is budget available from either PNDLM or Iron Gate cash flow, Audrey will lead an effort to rapidly iterate on a new marketing plan.

A single marketing plan document will be formally written and published. Weekly meetings will measure and analyze the success in executing the plan, and drive the evolution of the plan, over the course of the year. The plan will specify the consistent use of tools including Pipedrive to provide real-time analytics necessary to measure the effectiveness of the marketing and subsequent sales efforts.

Agenda Points for IG Summit

• Level Set— $2M NET/yr, and I'm finding newer bigger opportunities. If it's not IG, we should move quickly to find something else.
• Opportunities to incorporate AI into the product
• Review Plan below / spreadsheet
  • Include participation in exit for Audrey, Jake, Bill Yé
  • Review profits interest plan (below) and define milestones
  • PNDLM investment currently hundreds of thousands per year (in actual cost, not just lost opportunity) which needs to be addressed in writing
• Create materials to Present post-summit findings and new investment plan to majority vote partners (Troy, Matt, the Adams') for debate/signature
  • Deliver via net presentation OR additional partners meeting before EoY
• ICP
  • Add in a clause to dissolve a customer contract if the customer sucks
  • Re-evaluate criteria by which we take clients on
  • Potential new higher minimum fee
• [Essentialism] Clear internal (if not external) mission statement— why are going to throw our time and efforts at this?
• Call to Kim Im?
• September 18 to IG summit notes

Notes on "Profits Interest"

Further down a so-called "Profits Interest" program is contemplated as a possibility suggested by our CPAs for issuing equity to you key contributors without disrupting the existing cap table in a traditional. This is primarily a consideration because there is some fatigue among the partners from diltuing and granting and buying back equity over time, although we've proven now that it's possible to do, and would be even more so if we defined good buy/sell clauses in the operating agreement through which units could change hands when things need to be balanced out. Your feedback gladly accepted on all points; happy to chat individually to clarify points or hear concerns.

(Update 20251006) It appears we may have inadvertently created a profits interest program on Oct 9 2024 when we answered some questions for the CPA about the new grants to Audrey and Bonnie. Here are the questions we have out for the CPA via email as of today. We need these answered to clarify the current state of the cap table and equity programs so we can write up current state and go-forward state accurately in the operating agreement.

• On Oct 9, 2024, did we issue profits interest or capital interest to Bonnie? In either case, are the ways we are proposing structuring the buy backs in 2025 still workable?
• After issuing profits interest to Audrey or Bonnie, do we have multiple “classes" of “units" on the cap table, or just one? Should more than 900 “units" exist at this point by the nature of the profits interest grants?
• How are we defining the so-called hurdle it seems we implicitly created when we granted that profits interest? For the purposes of the operating agreement, but also just to keep things straight and explainable to the partners.
• Given all this, how would you write out the cap table today? (What we articulated for “After Oct 9” in the thread below doesn’t seem correct, in hindsight.)

Partners Meeting 6 Dec

• set a basic agenda for next two days including evenings.
• @Dean expressed interest listening in on some of the marketing discussion today and @Matthew Janik @Jake Ferrin may also be available to join up virtually for some of it… so we are likely to broadcast on Slack, but I am also planning on taking notes of the sessions and probably recording some of it so that people are not stressed to attend.

Opening Statement

Team,

(To Audrey for marketing plan review)

Marketing Plan

The following is a plan I asked Audrey to draft that specifies how we could use six figures of hypothetical cash investment provided by PNDLM in order to generate significant leads. The summary of her plan is as follows.

TODO— Audrey or Dana finish and fill in summary.

Sales Plan / Cookbook / Operations Plan

TODO— Are any of these necessary/helpful for this conversation or for the numbers? Who to collaborate with? Trevor? Jeff Schneider? Others?? Could specify sales cookbook, customer fulfillment process, product development process...

Financial Prospectus

The following is a 3 year prospectus designed by Dana and Bill Larson that outlines the potential financial performance of the company, its valuation over time, and the owners' distributions should the plan be executed successfully.

TODO—

• Attach prospectus here.
• Break down the PNDLM development balance.
• Incorporate Jake costs into prospectus.
• Review PNDLM cost vs lost opportunity (and what we are calling it)
• Provide rationale for cost vs. lost opportunity amounts owed to PNDLM, and the suggested instrument(s) in which PNDLM would be paid back.

Operating Agreement

A new formal operating agreement for the business will include—

• Recognition of the investment in dollars that PNDLM has made and will continue to make, and an agreement to repay that investment either through a loan instrument, equity, or some combination thereof;
• A formal commissions schedule for salespeople and referral partners;
• A profits interest program that provides incentive to key contributors (being careful to design the program according to IRS requirements);
• Typical buy/sell rules and repurchase clauses, to be discussed and agreed by the partners.

Profits Interest Plan

A Profits Interest is an IRS-sanctioned form of equity unique to LLCs and partnerships that entitle the holder to a portion of only the upside of a business from the point at which it is created. It's particularly useful for compensating contributors who help grow a company from a certain point forward, without diluting the existing "equity" of the existing partners. The company is able to decide, and codify into its operating agreement, the rules around wether or not Profits Interests holders receive distributions or have voting rights. And as a bonus, issuing a Profits Interest does not create a tax event for either side if done correctly.

More: ChatGPT conversation

An example scenario—

• If today, Iron Gate Safety LLC's cap table is 900 plain capital units, with a total hypothetical valuation of $4M;
• A Profits Interest of 100 units of the upside beyond that hypothetical $4M valuation is granted to a contributor, creating a "hurdle" at $4M;
• The company sells at some point thereafter for $5M;
• The calculation for payouts of the $5M to the partners works around the hurdle as follows—
  • $4M of the proceeds, or the valuation below the hurdle, is paid out only to the partners holding the original 900 capital units;
  • The remaining $1M of the proceeds is paid to both the original partners AND to the Profits Interest holder according to their unit holdings above the hurdle.

In total the Profits Interest holder holding 100 units of a total 1000 units above the hurdle would be entitled to 10% of the $1M, or $100k total payout.

To contrast, in the event that the company sold for less than $4M, the Profits Interest holder would receive nothing. This is why you could reason that the partners' existing equity in the value of the company built to date is not diluted by the issuance of Profits Interest.

My suggestion for the design of a Profits Interest program would be to invite key contributors— Audrey, Jake, Bill Yé, and Trevor if he has time to work on the business going forward— to suggest at which measurable milestones that Profits Interests would be granted to them, at what times, and comprising how many units. The partners could then accept or negotiate on such a schedule before it is codified in writing into the agreement.

It is common to include clear rules in the operating agreement for how and when Profits Interests are automatically bought-back or revoked, such as a Profits Interest holder quitting on their own accord, being terminated for substantial underperformance according to plan, for misconduct or acting in bad faith towards the company, etc. In drafting these rules I'd suggest consideration of the fact that the work effort required to achieve an exit for Iron Gate should be in my mind no more than 3-5 years— in other words, obligations of performance for realization of these instruments would be on no one person for any infinite period of time.