The $2 Million Idea

If someone said he or she would invest up to $2 million USD into your business idea, but you had to make that back in two years what would you do?

 

I would open a brothel in Nevada.

 

I don't know if you watch Shark Tank (I do from time to time), but the sobering reality is even with all their connections and influence sometimes the Sharks end up losing their money. You'd think just their names alone should open any door anywhere and virtually any business should succeed under their watchful eye, but that's not always the case. So I'd ask myself these questions:

1. How influential are my investors? Will they use their influence to help the business succeed when their help is needed?
2. Do I have it in me to see the business through to fruition (making enough to pay it back and then some)?

By the way, why $2 million? Seems like an outrageous amount of money. Start low. Ask them to invest $50K first and then you can start growing it from there. At least you won't take the outrageous hit when or if the business goes south.

 

Keep in mind that every one of those people that sit up there in that chair on that show got very, very lucky... Cuban is a prime example of dumb luck.. right place at the very right time.

 

Breaking Bad ......

 

I have had the misfortune to be involved with a few companies that were invested in by Vulture Capitalists. The numbers that they used to throw out then about their business is that they typically hit a success in 1 out of 10 ventures that they invest in. That one hit, however, more than makes up for all of the investment losses for the other ventures. The math does seem to work. Let's say they invest $2MM in 10 companies or $20MM. $2MM in a start up would get them say 40% in equity in each company. If one of the companies hits a valuation of $100MM four years later, they have doubled their investment in four years. Pretty nice return. If they get lucky and a second company hits it big, the profits are amazing.

 

Actually $2 million is not outrageous at all. Just the development costs for a custom built platform goes in the $100K+ range.

 

To me it is. The emphasis should not be on "up to $2 million" alone, but also on the fact that has to be paid back in two years. When you think in those terms it does seem outrageous. What venture can you think of that would make you $2 million in two years provided that it's something you have to develop from ground zero to something of a value (according to the OPer it's just a "business idea")?

 

There's many online ventures that went from zero to tens of millions in 1-2 years so it's definitely not impossible.(look at facebook or groupon, they went from zero to being worth billions in less than 2 years). Not saying the OP may start the next online big thing..but it's possible if he has a great idea.

If you could take $50K and turn them into $100K, what's stopping you from scaling up to double that $1 million?

 

2 $Mil Is a huge responsibility to take on. No idea what I would invest in because it would have to be something that made at least 100-200K/month back after taxes and operating expenses so in reality it would have to make like 300-400K/month net and his is a tall order for somebody who does not know what exactly to invest in. Its relatively easy to get an investment on a good project but following through to the end is another story all together. I guess the most important thing to consider is who you are taking the 2mil$ from.

 

He started a business, made it big, then sold it. Not a ton of luck involved. Then basically did again by starting a site for something he was interested in (Sports Broadcasting) it got huge and he sold. Then he made wise investing decisions. I'm not saying there wasn't luck involved but give the man some credit for being creative, ambitious, and working hard?

 

Probably branch out into the marijuana business in the states that are legalising it. Do that nice and early and in a few years your business is one of the oldest and most established in that niche. From there you can then branch out and into other states that eventually legalise it because you have the money, brand name, knowledge etc.. to do so.

 

I would go with the brothel in Nevada hahah... no seriously. it's a win-win, throw a couple strip clubs up is well.

Or property, find a hot market. Where I live at the moment house prices are going up $1200 a day. People are literally buying houses then selling them a month later for 30-40k profit.

 

Is this a hypothetical question? Is this loan from a loan shark? What happens if you don't pay? All loans are pretty much due back immediately. If you don't pay, there's interest. Credit card promotions start with zero interest, but it's prudent to pay back ASAP or you might find yourself without the income, for whatever reason, to make monthly payments. Is two years to default standard practice? Or is it two years interest and payment free?

There are many companies that never borrow money. Wouldn't you rather run your business without borrowing? It's a dilemma. If your business doesn't have the growth that you want, it's hard to turn down loans to try to inject life into it. It's hard to believe that some companies never borrow a nickel. It depends on what kind of company you have. I'm no expert. Good luck.

 

Would never happen. $2m investment on a company with a zero dollar evaluation? No need to even entertain this topic..

 

I remmeber this answer and it's been about three days that I red it. Problem was I was walking in a crowded place. Had to pretend I had an itch around my cheek.

 

I always want someone to invest on my idea if only these investors aren't such a shark, they want the returns to be outrageous than how much they invest. what can i do, they're businessmen of course.

i kept the idea still and i bet no one still thought of it.

 

Deposit the amount to a bank as a fixed deposit, to 2 years, take all the interest for yourself, then pay his $2M back at the end of 2 years. Deal done!

 

I'll invest that money in property.

This is one of the safest investment you can ever make without any risk. And, besides, I've read that 90% of all millionaires invest in property. Within 2 years, it will in fact return handsome amount of profit to you...