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#1
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Investing in someone
Hi, I've never dealt with this situation in anyway so I have no idea how it works. Basically there's this guy trying to get a start up business. He needs 5k in investing and I'm interested. I'll get 40% of what he makes every month if I invest. He'll be starting out at AT LEAST 2500 a month which starts me out at 1k a month. Now if he gets really good at his job, and he is a go getter type of person, he can make 100k a year or more. Our deal would be I get 40% of him for life. So if he makes 100k a year I'm getting 40k a year which is amazing. The problem is its toooo good. It will definately be written down in paper, but I'm not sure how I can protect myself. When he becomes a big shot 100k a year he sure as hell isn't going to want to give me 40k a year every year. Whats stopping him from closing this business and opening a new one doing the same thing. How well can I protect myself?
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#2
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Re: Investing in someone
get a lawyer, write a partnership, sue him if he fs you over. the whole thing happens all the time
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#3
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Re: Investing in someone
[ QUOTE ]
get a lawyer [/ QUOTE ] |
#4
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Re: Investing in someone
You're taking too much. Calculate your risk, at say 5:1 -- your 5k gets you 25k. Make sure he keeps enough money to survive (or you'll never get paid), but not enough to be happy -- say 2k mo. Take your 25k as 50% of everything over 2k mo., and after the 25k is paid keep a small piece of the deal ... 5-10% for life. When you've worked that out, get a good contract attorney to write it up. Deals that seem too good to be true usually are. They come from one party that's desperate -- they're not likely to be happy with the deal when they're no longer desperate. Just take what's fair after calculating your risk.
Also make sure gives you a detailed business plan, and detailed personal expenses that you can analyze -- look for the holes, missing expenses or forecasts that are too optimistic. If the equation doesn't work -- drop it. Good luck. |
#5
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Re: Investing in someone
Thanks Sheetwise you da man, definately taking your advice.
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