Iron Gate Plan 2026 (Draft)
This Iron Gate 2026 Plan is for discussion purposes only and is non-binding. Various points of this plan are pending lawyer or CPA review and may be revised in a future draft.
New Operating Agreement
In order to legitimize Iron Gate's ongoing business expansion efforts, secure the partners' individual and collective interests, and prepare for an eventual acquisition, a formal operating agreement is to be drafted, reviewed by the partners, and executed as soon as possible, with a target signature date of January 31, 2026.
The operating agreement will specify a management structure, outline voting requirements for various business activities, define drag-along and buy/sell agreements, and other typical clauses as may be suggested by counsel.
TODO—
- Solicit partner feedback on desired
- Solicit CPA input on Washington/Nevada registrations
New Marketing Plan
In 2026, the primary movement for Iron Gate will be to rapidly iterate on a new marketing plan, overseen by Audrey.
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.
The goal of plan is to close 15 new deals over the course of 2026, resulting in between between $15k and $120k increased MRR (TODO— update these figures). The success of this execution in 2026 will prove the viability of the business, and warrant PNDLM's ongoing involvement and investment into Iron Gate.
Necessity of Investment
PNDLM has for some years provided significant software development and maintenance efforts to Iron Gate at no cash cost. PNDLM will also need to inject additional cash to cover the costs of executing the marketing plan in 2026.
In order to compensate for these investments without diluting the partners, PNDLM is willing to set up a simple loan or similar mechanism in rough accordance with the following terms, pending CPA guidance—
- PNDLM will provide cash and ongoing software development services (via formal invoice) to Iron Gate, which will increase the balance of the loan.
- At which time Iron Gate cash flow reasonably warrants, after business expenses and reasonable partner distributions, payments may be made against the balance of the loan.
- The loan will be at the lowest interest rate which may be required by the IRS to make the loan "bona-fide". (To be determined, some interest-only payments on the loan may be required in 2026.)
TODO—
- Determine initial balance & algorithm for payback
- Roll-call partners vote
- "Transparency of the software costs" cadence? Monthly, bi-weekly.
- Before sign on the Locomotive deal, get these figures agreed.
Bonnie Adams Share Sell
In consideration of the investments made to date, PNDLM requests to be the buyer of Bonnie Adams' share sell in 2025 at the price previously agreed to among the partners. The result of this action would be a reduction of $(TODO) moneys owed by Iron Gate to PNDLM and the transfer of (TODO) shares to PNDLM, pending CPA guidance.
TODO—
- Roll-call partners vote
Algorithm for Partner Distributions
Starting in 2026, and while MRR is below $100k, the Iron Gate controllers with PNDLM's consent propose that all partners under the first hurdle receive a monthly distribution at the rate of $5 per unit of ownership per month. Accordingly, the total amount distributed per month will be $4500.
The controllers further propose a distribution increase at or above $100K MRR, to be discussed and agreed among the partners at such time.
TODO—
- Break this out to exact amounts by Partner
- Roll-call partners vote
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.