this post was submitted on 28 Nov 2023
1 points (100.0% liked)

Entrepreneur

0 readers
1 users here now

Rules

Please feel free to provide evidence-based best practices, share a micro-victory, discuss strategy and concepts with a frame work, ask for feedback, and create professional conversation. Treat every post as if you're at work and representing the best version of yourself.

founded 1 year ago
MODERATORS
 

Someone wanted to invest 30k into my landscape company for 5% return, now I’m not the smartest guy out there and someone is free to correct me if I’m wrong but shouldn’t that 5% be until the loan is paid off and not until I give the company up

Again I’m very new to this so I could be looking at this horribly wrong

you are viewing a single comment's thread
view the rest of the comments
[–] iamzamek@alien.top 1 points 11 months ago (1 children)

Ownership is all you need, fight for it and keep as close as 100% possible. Don't sell it cheap, better to use your own savings.

[–] OldOrchard150@alien.top 1 points 11 months ago

. If you made 45k last year, your business is probably worth 150k max. If you do most of the work, it's probably worth less. But this guy thinks it's worth $600k. Something is wrong. I don't know what.

So, if he gives you 30k now and then you sell a week later for 150k, he gets 7.5k. Makes no sense at all.

But also, equity also means nothing if you never sell the business, meaning he gets to keep the money and never has to give anything back to the investor. Most small businesses are worth $0 equity as they have basically $0 potential to be sold for any reasonable amount in the future.