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    1 Reply Latest reply on Apr 1, 2009 11:01 PM by Bridge

    Questions on a non-tangible investment Angel Investor

    Molokay Newbie
      Due to nature of my online business I needed someone to be in charge on the marketing side of my website including SEO. The SEO services are really expensive and extensive, but most important, I need it but don't have the money. So I got an offer which seems to be reasonable: This individual with proven experience in the field has offered to invest his time and effort as an Angel Investor for a one figure percentage (5).

      Because of my current economical situation, with a startup funded by my own resources (and my fulltime job) and the lack of a business plan to acquire an Angel Investor, it is much better for me to give the percentage amount when I sell the company than paying about $2,000 per month for such services.

      Here are my question, I hope I can get help from experience business people:

      • Is the arrangement good considering my situation?
      • If not, what do you think should be a proper percentage? What would be a fair number for both of us?
      • Assuming that my decision is to do it, what things should I put on paper in order to be fair but also be protected?
      • Is there any template document I can use for this transacion? Is there an "Angel Investor" contract already common in the indusry?

      Your help will be much appreciated. The questions I have are based on what I could come up at the moment, if you think there are other ways or solution please feel free to let me know.

      Thank you so much in advanced.

      P.D. For privacy reason I cannot name the company or my website. Google crawls forums like this and these questions may not benefit the image of my company.

       


        • Re: Questions on a non-tangible investment Angel Investor
          Bridge Navigator

          You need to define exactly what the "investor" will do for his percentage; i.e. how much work. Is it for a specified time or ongoing?

           


          Have a partner to with complimentary skills is not a bad thing and you are talking about a very small percentage. If you hit a "home run" with the business, you will look back at the 5% as a good investment; if the business fails, you saved yourself at least $2,000.

          You should have an attorney review any documents you plan to use.