VAULT

Private · Master Plan · v1.0
VAULTENTITY STRUCTURE

VAULT Entity Structure

Recommended structure: 3 entities. Counsel of record: Moore & Van Allen, Charlotte, corporate group. Backup: Robinson Bradshaw. Formation state: Delaware for VAULT IP LLC, North Carolina for VAULT OpCo LLC and VAULT PropCo LLC (if applicable). Registered agent: Corporation Service Company (CSC) for all Delaware, in-state agent for North Carolina.

1. Why Three Entities and Not One

Founders often start with a single LLC for simplicity. That structure survives about 18 months in a business with real estate exposure, brand licensing potential, and a competitive IP asset. Then it becomes a lawsuit target and a fundraising blocker.

The three-entity structure achieves four things:

  1. Separates operating liability (a slip in the sauna) from real estate (the building itself) from IP (the brand and THE VAULT INVITATIONAL).
  2. Enables licensing VAULT brand to a second location or a partner without exposing OpCo’s cash flow.
  3. Enables selling the IP or the real estate independently of the operating business, which is how healthy exits work in this category.
  4. Enables raising outside capital into OpCo without giving investors the IP, which is the highest-value asset over time.

The cost of this structure is roughly 12,000 to 18,000 in additional formation, ongoing tax filings, and inter-company agreement drafting. That cost is trivial relative to what a single-entity structure creates in problems by Year 3.

2. Entity 1: VAULT OpCo LLC (North Carolina)

Purpose: operates the physical club, employs staff, holds member contracts, runs corporate wellness contracts, runs the apparel business, holds the café operating license.

Formation state: North Carolina. NC franchise tax is straightforward and there is no benefit to Delaware for an operating entity based physically in Charlotte.

Members (Y1 assumed cap table): - Taj Hines: 55 percent membership interest (Founder Class A) - Trill Walker: 15 percent membership interest (Founder Class A) - Reserve for outside capital: 20 percent (Preferred Class B, currently unissued) - Reserve for employee equity pool: 10 percent (Class C, unissued, formalized when GM and B2B Lead hired)

Governance: manager-managed LLC with Taj as sole Manager for brand and vision matters, CSO (Trill) as Manager for financial and strategic matters. Major decisions (financing, sale, dissolution, capital calls, key hires above 150,000 base) require both Managers.

Board of Advisors, non-voting: 3 seats to be filled by end of Y1. Slots: hospitality operator (Aman, Auberge, or Rosewood alumnus), fitness industry operator (Equinox or Life Time alumnus), Charlotte civic (former banking exec or a foundation officer).

Bank accounts: Truist Business Banking for operating. Ally Business for treasury reserve (better yield). Two-signature requirement over 25,000.

Insurance held here: general liability, professional liability, workers comp, property renter’s insurance, business interruption, cyber, D&O for Managers. Full stack in Section 03_INSURANCE.

Employer of record for W2 staff (GM, boutique lead, café manager, front desk, admin) plus 1099 relationships for instructors and PT contractors.

Distributions: no distributions until 18 months of runway is in the treasury account. This is written into the Operating Agreement.

3. Entity 2: VAULT PropCo LLC (North Carolina)

Purpose: holds real estate if the club purchases rather than leases the building.

Threshold to activate: only if the building purchase is on the table (Y2 conversation earliest). For the Y1 leased-space model, PropCo remains formed but dormant. Do not skip formation.

Formation state: North Carolina, aligns with the physical asset.

Members: same as OpCo Class A allocation, mirrored. Preferred Class B in PropCo can differ from OpCo if a real estate LP joins later (common structure for a hospitality LP investor who wants building exposure without operating exposure).

Governance: mirror OpCo structure with real-estate-specific decisions carved out.

Bank accounts: separate. PropCo cash never commingles with OpCo cash.

Insurance held here: property insurance if PropCo owns the building, general liability for the physical structure.

Inter-company lease: PropCo leases the building to OpCo at market rate, drafted by Moore & Van Allen. Rate benchmarked against Charlotte comparable Class A boutique fitness leases.

Y1 status: entity formed, no assets, no bank account activated. Cost 500 to keep in reserve.

4. Entity 3: VAULT IP LLC (Delaware)

Purpose: holds all brand IP, all trademarks, all copyright in VAULT-branded content, all rights in THE VAULT INVITATIONAL, all streaming and broadcast rights, all licensing rights, all apparel brand marks, all domains, all social media handles.

Formation state: Delaware. IP LLC benefits from Delaware’s mature IP jurisprudence, Court of Chancery, and standard investor comfort.

Members: mirror OpCo Class A. However, IP LLC is likely to have a different Preferred class in Y3+ if VAULT licenses to a second location or a joint venture takes the brand elsewhere.

Governance: same two-Manager structure as OpCo. Trademark filings, licensing deals, streaming deals, and any sale of IP require both Managers.

Bank accounts: activated when licensing revenue begins. Y1 dormant.

Assets held Y1: - VAULT and THE VAULT INVITATIONAL word marks and logos (registered through the trademark strategy in doc 01) - vault.club domain and all VAULT-related domains - @thevault Instagram handle and all social handles - Copyright registration on all original brand content (look books, video, editorial essays) - Contractual assignment of any work-for-hire deliverables from photographers, videographers, brand designers

Licensing structure: OpCo licenses VAULT IP from IP LLC for use in Charlotte club operations. License agreement drafted by Moore & Van Allen, royalty rate 4 to 6 percent of gross revenue paid quarterly. This creates a tax-efficient cash flow to IP LLC (which sits in Delaware, no state income tax on royalties held).

This royalty structure also demonstrates arms-length value of the IP to any future acquirer or investor. Sloppy IP structures kill exits.

5. Cap Table Framework

Y1 fully diluted cap table (target state at month 6):

  • Taj Hines: 55 percent common
  • Trill Walker: 15 percent common
  • Employee Equity Pool: 10 percent common (unissued, reserved)
  • Preferred Series Seed reserve: 20 percent (unissued)

Trill’s 15 percent is founder equity in exchange for CSO role, brand architecture, competition IP development, and the operating book he built. Not for a cash investment. Documented as founder equity with 48-month vest, 12-month cliff, single-trigger acceleration on sale, double-trigger on involuntary termination.

Taj’s 55 percent is founder equity vested immediately at formation with a 36-month cliff-less schedule (she is the founder and face, no vesting risk to her position).

Trill takes no VAULT salary. His economics come from three places: (1) founder equity in VAULT IP LLC and OpCo, (2) a fair-market licensing arrangement between VAULT and The Walker Group for competition production services, (3) any consulting fees for structured advisory work outside CSO scope. This is documented in the Trill Related Party Agreement, drafted by Moore & Van Allen.

Employee equity pool: 10 percent common reserved for GM (2 to 3 percent), B2B Lead (0.75 to 1.5 percent), Merchandising Lead (0.5 to 1 percent), Head of Instructors (0.25 to 0.5 percent), and first two hires below (0.25 percent each). Grants are stock options with 4-year vest and 1-year cliff, standard.

Preferred reserve: for a potential Series Seed raise in month 15 to 24. If the corporate wellness pipeline hits Y2 targets, a raise of 3M to 6M at 22M to 35M post is realistic. Preferred stack drafted by Moore & Van Allen using NVCA standard docs with modifications.

6. Founding Documents Checklist

For each of the three entities:

  • Certificate of Formation (Delaware) or Articles of Organization (North Carolina) filed
  • Operating Agreement executed (drafted by Moore & Van Allen, tailored per entity)
  • EIN issued by IRS
  • Federal S-corp election evaluated (default LLC treatment vs S-election, decided in coordination with tax accountant)
  • State tax registration in North Carolina, plus foreign qualification of VAULT IP LLC in North Carolina
  • Registered agent engaged (CSC)
  • Bank account opened (OpCo Day 1, IP and PropCo dormant until activated)
  • 83(b) elections filed within 30 days of any equity grant to Trill or employees (mandatory, missing this triggers avoidable tax)
  • Corporate minute book maintained per entity
  • Annual report filings calendared

Additional documents:

  • Trill Founder Equity Grant Agreement (48-month vest, 12-month cliff, defined acceleration triggers)
  • Taj Founder Equity Grant Agreement (fully vested, no cliff, IP assignment)
  • IP Assignment Agreement from Taj and Trill personally to VAULT IP LLC (all pre-formation work product)
  • Inter-company License Agreement (VAULT IP LLC licenses VAULT brand and THE VAULT INVITATIONAL to OpCo)
  • Related Party Agreement between VAULT OpCo and The Walker Group (competition production services)
  • Related Party Agreement disclosure for Trill (documenting he is CSO of VAULT and CEO of TWG, addressing conflicts)
  • Advisor equity grant template (for the 3 board of advisors seats when filled)

Because Trill is CSO of VAULT and principal of The Walker Group, and because TWG produces THE VAULT INVITATIONAL under contract, there is a related party structure that must be disclosed and priced at arms length.

The Walker Group Production Services Agreement: - TWG produces THE VAULT INVITATIONAL annually under a Master Services Agreement - Fee: benchmarked against comparable competition production (Red Bull BC One, Battle of the Year, comparable pole and dance productions) at 425,000 to 675,000 per event - Payment: 40 percent on signature, 40 percent on production, 20 percent net 30 post-event - Ownership: VAULT IP LLC owns the competition IP and all recorded content, TWG is a work-for-hire producer - Renewal: annual, evaluated by Board of Advisors and Taj - Disclosure: fully disclosed to any Series Seed investor as related party

This structure is standard for founder-adjacent service arrangements. The key is arms-length pricing documented via a third-party market analysis at signing, refreshed every 24 months.

Moore & Van Allen fee estimate: - Three-entity formation, Operating Agreements, IP assignment package: 45,000 to 60,000 - Trademark filings (see 01_TRADEMARK_STRATEGY): 12,000 to 18,000 - Inter-company License and Related Party Agreements: 12,000 to 18,000 - Contract templates (see 02_CONTRACT_TEMPLATES): 25,000 to 40,000 - General counsel retainer Y1 remainder: 60,000

Total Y1 legal budget: 155,000 to 195,000.

This is the price of a foundation that survives. Cutting this to 40,000 by using LegalZoom and templates is the single most expensive mistake a founder in this category can make. The unwind cost at Y3, when a real investor or acquirer runs diligence, is 400,000 plus 6 months of delay.

9. Governance Cadence

Monthly: Taj and Trill review of pipeline, financials, brand posture. Quarterly: Board of Advisors meeting once BOA is seated (target month 8). Annually: Operating Agreement review with Moore & Van Allen for updates.

Written consent process: standing written consent template on file with Moore & Van Allen for routine decisions. Formal Manager meetings for anything material.

Records: corporate minute book maintained by Moore & Van Allen in Charlotte for all three entities. This is not delegated to a founder.