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    6 Replies Latest reply on Apr 13, 2010 9:59 PM by rbrk_n

    Investment proposal

    bugirl511 Newbie
      I have an investor who is interested in investing in my company. The company does need money to expand. The investor basically wants to buy herself a job, not too much experience.
      How do I determine what % she gets back from her investment and when? Does anyone have a standard investor proposal that I can copy?
      Thanks
        • Re: Investment proposal
          golden1 Newbie
          This is a matter of quantifying impact. You have to be able to quantify the actual impact her investment will have on working capital. Obviously, it will help expand your business and impact your bottom line. Quantify that particular impact and determine her investment return based on the business' annual profit, along with a reasonable salary congruent with her skills and experience. As far as the standard investment form, you're better off consulting with your attorney to avoid potential future problems.
          • Re: Investment proposal
            DomainDiva Ranger
            If she is buying a job and does not have a lot of experience, you aer headed for trouble...big time. She will own a piece of the action, be employed and is goingt o start making demands on product, finances and anything else. Maybe you need the money but do you need the potential problems?
            • Re: Investment proposal
              LUCKIEST Guide
              Investment proposal

              Who r u?? Go to Members page and share some info.

              You need both an accountant and a lawyer
              <!--Session data-->
              • Re: Investment proposal
                UncleLeon Scout
                The investment and the employment are two different issues. However, it's not unusual for an "investor" to go with the "investment" in a "working partnership".

                If you don't really want the investor as an employee, you may compare it to a sandlot baseball game. When choosing up sides, you may want the big-hitter - superstar; but in order to get him, you have to also take his poor-playing brother.

                Life's full of compromises.

                Personally speaking; if I had to accept someone that I thought would be detrimental to my business....especially someone with financial leverage; I would certainly not consider it.
                • Re: Investment proposal
                  rbrk_n Newbie

                  You are getting good advice, here. Don't make the same mistake we made. Your agreement needs to address real issues that will arise. Who has the final say when you and your new partner disagree? What happens when you aren't happy with their performance? Can you get rid of the employee without buying them out? What happens with percentages of ownership when you invest further capital or in the event that you contribute more time in the company than your partner? What happens when times get tough? Consider separating the investment, the job, and, if applicable, the ownership of the business - each aspect should be clearly defined with a reasonable way to terminate each or all. If I had it to do over, I'd borrow from the investor and I'd hire the worker. I'd only offer up a percent of the business if it was absolutely necessary. Unless their investment was equal to or greater than my investment, I'd make SURE they understood the golden rule. Good luck with this.