ForumsFinancing Tips

It's the latter. An investor takes equity in your company, meaning they participate on a pro rata basis in your profits and loss. If they were just charging you a %, they would be debt holders, with the most common example being a bank.

Just as an FYI, finding an investor is difficult. 99% of businesses are not businesses that investors would want to invest in. Unless you have an innovative product/service, or have started to develop a strong brand and franchise concept, an investor won't be interested. For example, I've seen members of this forum seek investors for clothing stores. Most retail stores concepts have low barriers to entry, so if an investor really wanted to be in the retail clothing business, they'd just go ahead and open one and find a manager. In other words most entreprenuers don' bring enough to the table to make an investor want to invest with them.

So in other words, you'd be better off spending your time trying to find a lender than an investor.

How does investors work

Back in July you wrote "I am trying to start a new business - Childcare Service or Daycare"

Is that what you are talking about. NOW. You can go to SCORE online (FREE) and find a SCORE Counselor who might be an investor or who has a legal background that can help you.

You should also talk to YOUR lawyer.

Good luck, LUCKIEST

This is for the daycare and another venture I'm looking at. The daycare requires a lot more than anticipated, especially with the price of commercial real estate and the requirements to operate the daycare. To maximize the potential of having a daycare requires a facility at least 8,000 square feet and I have found in my area to get a property that will need minimum modifications start around $500,000 which is a bit out of my range right now.

I am putting together a business plan for another venture I'm looking at. It still will require commercial property but I think I can manage with a 3,000 - 5,000 sq ft facility. So far with preliminary figures operating the business at 70% capacity will net me about $200,000 profit over the first 12 months. But, again, I need to complete the plan and analysis and have them reviewed for accuracy.

Thanks again for your input and I will contact the SCORE group.

Gene2010,

The investors I work with all struture fees on a per deal basis. Every deal is different. Do you have a business plan or executive summary I can review?

loanguy@walkerlender.com