A proposed structure for David's capital and Steve's operating role in the Verified platform — a "silent money / working operator" partnership. David's money is protected and paid first; Steve is paid for the work and rewarded for building the value. This is a fair, considered proposal — structured to protect David and to reward Steve only for building real value — to be documented by qualified counsel and a CPA.
The platform & the capital
The Verified Companies, LLC (the HoldCo David co-owns) sits on top of a five-division licensed contractor platform, rolled out on a gated schedule: Verified Construction (KB-1 GC) and Verified Electric (the licensed electrical roll-up vehicle) launch in Year 1; Verified Plumbing in Year 2; Verified HVAC follows in Year 3; and Verified Civil (A general engineering) in Year 4. Steve is the qualifying party on the two Icarus licenses (KB-1 + A) and runs Verified Construction and Verified Civil himself; Adrian is Qualifying Party on Electric; a licensed lead runs Plumbing; an HVAC qualifying party is to be named. Icarus Construction LLC — Steve's entity, contributed in as valued, credited capital — carries the KB-1 and A licenses. Acquired shops fold into the platform as assets under the relevant license.
~$10M
David's committed equity — the cap, called in gated waves as deals close, alongside ~$6M of acquisition debt / seller notes. Drawn against milestones: a ~$1.1M Stage-1 startup in Year 1 that proves the system for ~$461k and lands the first electrical firm, then gated acquisition waves — each released only as the prior integrations prove out — building to nine acquired firms across three service trades on top of the five-division licensed platform. Seller financing and bank/SBA debt extend each dollar further.
The distribution waterfall
Profits and exit proceeds flow in this order:
1
Return of capital
→ David
David's invested capital comes back in full before any profit is split.
2
Preferred return
→ David
10% cumulative on his unreturned capital, accruing on each tranche as it is actually drawn — his priority yield for the money risk.
3
Profit split → David
→ David
55% of all profit above the pref — David keeps the majority of the upside.
4
Profit split → Steve
→ Steve
45% gross operator carry (~40% net after a division lead's 5%) — for sole operations + the contributed KB-1 GC entity.
What each brings & how each is paid
■ David — the capital partner
Brings~$10M in committed equity, called in gated waves as deals close (alongside ~$6M of acquisition debt / seller notes that extends each dollar), a home base in the Scottsdale Airpark, and business resources — leased/provided to the company at arm's length.
Is paidReturn of capital first, a 10% preferred return, then 55% of profits above the pref — plus rent & fees for his space and resources. Downside-protected, priority-paid; base case (The Plan roll-up) ~2.8× / ~33% IRR — ~$28M to David on ~$10M of equity deployed. The organic-only floor — if we prove the system but never acquire — is ~$8.0M at ~1.8×, so his downside is bounded while the roll-up carries the upside. A whole-project / strategic-buyer premium is further optionality on top.
RoleSilent on operations; approves major capital moves. No salary — paid for his money, not his time.
Exit optionalityAt exit David can sell the platform whole, carve out and sell any single division, or keep operating and collect distributions — five separately licensed lines, each independently saleable.
■ Steve — Founder & CEO (operating sponsor)
Brings100% of operations, estimating, deal sourcing & integration; the AI back office and the Verified System; the contributed Icarus entity — two licenses (KB-1 building + A engineering), credited as capital; and captive McCully demand. He is the hands-on integration engine early — personally installing the system into the first firms — and becomes cleanly CEO once the Integration Manager is under him.
Is paid — for the workA full-time operator salary set by a Staged Compensation Schedule tied to his McCully transition — $30k in the prove phase (still drawing his full McCully pay), $150k once the first firm is acquired (he reduces his McCully role), $250k full-time (matching his McCully base), scaling to $350k at full platform scale — about ~$1.6M cumulative over the hold (see the Staged Compensation Schedule exhibit). The salary is a senior operating expense — paid ahead of David's preferred return — with a floor (it never drops below the tier reached), set by objective triggers in his Employment Agreement, not annual discretion, and it sits inside the ~12% margin. Plus a 5% annual net-profit operator bonus and at-cost recovery of the shared back office. (Sourcing is rewarded firm-wide by a flat $1,000 referral fee per company that joins — Steve and David included — not a percentage commission.) No profit-skim management fee; his real reward is the carry, behind David's return.
Is paid — for the valueA 45% gross operator carry on profits above the pref (~40% net after a division lead's 5% profits interest) — ~$11.5M in the base-case roll-up, earned only after David's capital and 10% preferred return are paid in full. A single clean split, crediting the contributed KB-1 GC entity, captive demand, and sole operations. Vests over ~4 years.
The other seats
Division owner-operators Director = QP
Each live division is run by an owner-operator who is both its Director and its Qualifying Party — one seat, no separate QP stipend. Each draws a ~$50k Director/QP oversight wage + the ~$90k operator wage when they run a truck (~$140k combined) + threshold profit share — the QP/license folded in, no separate QP fee — and is granted a 5% vesting profits interest (exit equity carved from Steve's carry; single-trigger acceleration on a sale): Adrian anchors Electric today — and with his own KB-2 building license can qualify and run a second Verified division for another 5% — a licensed lead runs Plumbing, and an HVAC lead (QP TBD) comes on with the HVAC launch. Steve runs Construction and Civil himself under the Icarus KB-1 + A licenses — no standalone director on those lines on day one.
Sarah + the field W-2
Sarah runs the back office — $60k base + $10k per live division, W-2, no equity. Field crews are W-2 with company trucks, HSA, and full insurance + workers' comp from day one; the truck-runners who carry captive McCully demand earn a profit share on the work they turn. Cash pay for the role, with equity reserved for the division owner-operators who build and license each line.
Why the split is fair to both
David funds essentially all the cash and brings a home base + resources, so he keeps the majority (55%) of the upside, earns a strong 10% preferred return, and is paid first and protected. Steve's 45% gross operator carry (~40% net after a division lead's 5%) sits above a typical 20–30% because he contributes a licensed, dual-scope GC entity most operators would need years to build, brings captive demand from day one, and does all the operating. Three things Steve's side makes possible for David specifically: the licenses enable everything — they legally let David's HoldCo self-perform any electrical, KB-1 building, or A civil work (Icarus KB-1/A with Steve as qualifying party, alongside Adrian's electrical QP), which his HoldCo cannot do without them; captive commercial TI and whole-project work flows to David's own construction company, not a third party; and David keeps full exit optionality — sell the platform whole, carve out and sell any single division, or keep operating. Both sides' hard assets (David's property, Steve's entity) are handled cleanly and at arm's length, so neither gives an asset away for free. A fair, defensible structure for both.
Control & governance
Steve runs operations under a management agreement — full authority over hiring, jobs, pricing, integration, and marketing. A short list of major moves is joint: acquisitions above a set size, new debt, the annual budget, selling the company, and admitting new partners — with a pre-agreed deadlock tie-breaker so a disagreement never freezes the business. (Exact threshold to finalize.)