Selling a 40% stake in one of the largest forums on the net

I am selling a 40% stake in the LivingWithStyle forums located at http://forums.livingwithstyle.com in order to raise working capital for a new venture.

According to http://www.big-boards.com the LWS Forums are one of the largest and fastest growing forums on the net. You can see various big boards related data like Alexa rank and growth rates of the LWS Forums here

Stats:

• $6,000-$10,000 per month in revenue and growing fast. As a 40% stakeholder, you would get 40% of the monthly profits. You will be added to our payroll.
• 35,000+ members. Averages 125 new members per day.
• Over 500,000 unique IPs per month.
• Our month to month revenue growth rate has been in excess of 75% the last 4 months.

Various Information:

1. LivingWithStyle.com is a Limited Liability Company formed in Arizona. As purchaser, you will become a member of the LLC and own a 40% stake.

2. Any purchaser guarantees LivingWithStyle LLC first rights to repurchase their stake should they decide to sell.

3. Any purchaser will have input rights regarding strategic initiatives and I will work with them so their purchase is beneficial in more than just a simple financial means.


Asking Price:

I am asking $75,000. At current revenue growth rates, the purchaser will make their initial investment back in short time. This is a sound investment and in all honesty i'm sad to give up a part of this company. But I need working capital.

Interested parties should contact me via PM or at

 

what are the sources of the income? I only saw adsense on the forums.

 

Mostly Adsense. People also buy points for our integrated point system.

 

I saw this at dnforum...very interesting idea...never would have thought of doing it this way. Good luck with the partner.

 

Thank you for your kind words.

 

wow interesting offer. wish i had the money to invest. i assume you will give interested parties proof of income. what was your monthly revenue for the 1st 3 months of this year? (just wondering considering you have had a 75% increase month to month for the past 4 months)

have you thought about getting a bank loan?

good luck, i am sure you will find someone interested in this offer.

 

Yes, qualified parties will be provided proof of income.

Thank you for your supportive words.

 

How much UK traffic do you get?

 

Thus far in June I have received 233,859 page views from Great Britain. That's with keep alive off. We have a private group on the forum that was started by some Brits that is specifically for British folks.

 

Would this part ownership imply access to mailinglists for communication not related to the forum?

 

No, sorry. I will not do anything that will alienate or upset my forum members. That would. The members of the LWS forums are a fantastic group of people whom I love dearly. I cannot allow their inbox's to be filled with such things as a result of my doings. Thank you for your interest however.

 

How many partners are there? What is the current % ownership of each?

 

Just me. 100% at this time.

 

Just curious as to what other's thoughts are on this? Good deal?

 

Is it 40% of 6-10k/month (so 2.4 -4k/month for the buyer) or is 6-10k the 40% take?

 

My understanding is that it is 40% of the current revenue, which is between 6k-10k per month.

 

At the low end, it will take you 3 years to make up the investment, and the owner has stated that these numbers are a result of a recent growth in revenue - so there is no guarantee that those numbers will stick for 3 years.

As purely an income investment based on adsense income I would say this is not a good opportunity.

If, however, you have experience with growing forums and turning them into income generating sites, then this could provide a great opportunity - as long as you trust yourself to get it done and trust the owner to make the changes you would require.

One thing of concern is that the money will be used to fund an external project and none of it will be re-invested in the site. That means a further investment more than likely in order to improve it - or the re-investment of income from the site which would further delay getting to your profit point.

Another point of concern is that this is really a silent investment partnership, since the investor will not retain any real voting rights as the only other shareholder maintains over 50% ownership. The investor will have to trust the owner to make smart business decisions, and has nothing to go on as far as the owner's willingness to listen to advice.

Having said that, I don't know anything about the community - and the community could very well be the golden goose - depending on their demographics, willingness to spend, loyalty to the site, etc. The Digital Point Community raised $20K+ for new servers - it took a while, but we did it. This community is much larger as I understand it, so there could be a lot of potential there for revenue if it's done the right way.

I would expect an in-depth evaluation including expected growth, marketing plans, business plans and forecasts, history of the business, backgrounders on the site owner, information about the community leaders, etc. before even beginning to think about a $75K investment. A couple of grand you can do on a whim if you have the money to lose. $75K is a large investment even for the very wealthy.

 

Whe I visited, there were 2800 active visitors... That is some serious traffic...

 

Some additional points to the excellent assessment by Nevet

This might be a golden goose or a hangman's noose, depending on the fine print of the contracts.

Obviously I'm not saying there is anything amiss in this case because I'm not. I'm merely pointing out how a deal of this type may not be all it first appears. Sound legal advice and carefully drafted contracts can help make something a sound opportunity rather than a moneypit.

 

Well, I'm sure anyone who had $75,000 or that kind of money would get a lawyer to consult.