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Investor Advice and any horror stories.

Discussion in 'General Business' started by redfax1, May 14, 2008.

  1. #1
    Hi

    I have been doing IM for some time, and want to get to the next level so have decided on a partnership or an investors financial input as a possible way forward.

    Has anyone gone through this, and is their any standard percentage offered, a loan arrangement over piece of the business, that kind of thing.

    Would love to hear some success and horror stories.

    Sean
     
    redfax1, May 14, 2008 IP
  2. SeattleCPA

    SeattleCPA Peon

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    #2
    Venture investors often look for very high annual returns.... maybe 50% as a guess? That means, with compounding, that the investment should be doubling in value every (roughly) 18 months. If they put in $100K on Jan 1, 2007, by June 30 2008, they want their $100K to be worth $200K... by December 31, 2009, $400K, by June 30 2011, $800K

    The vig, as they say, is crushing.

    Angel investors probably accept way less... Maybe 25%? That means their investment should double in value every three years (roughly)...

    Most small businesses, in my experience, don't produce ROIs anywhere near these levels--which is probably why outside investors shouldn't be brought into deal.
     
    SeattleCPA, May 14, 2008 IP