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Should I sue my friend to recover my investment? (alien.top)

submitted 11 months ago by Thirdfcuk@alien.top to c/entrepreneur@indiehackers.space

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Hi, I’m a freelance software developer. My friend had an LLC and wanted me to join him for a project to revamp his online store.

I invested 5k and entered only a profit-sharing scheme. I worked on top of it, being in charge of the project. If successful, the profit shares would have been a great return. Big IF but I knew the risks.

However, soon after starting I noticed that my friend had exaggerated his financials and had no plan as to what he wanted to achieve. Also, I had to incur extra costs like shopify themes and other tools that he said he would reimburse me for but made a lot of excuses to not pay them back.

Fast forward to a couple weeks after we started, he’s shutting down his LLC. I told him we should re-do the contract since I signed with his LLC if the project should continue. He’s gaslighting me into doubting him and telling me to just trust him and not worry about it. Obviously I’m not stupid and I’m catching onto his conman traits such as talking big and always mentioning his big past successes and the high profile people he knows.

Basically he has no intentions to re-do the contract and firm on not returning my money. He constantly reminds me “if you quit the investment is lost” (actual clause in the contract). No clause about what happens if the LLC disappears. What are my rights? 5% of me says I’m misreading the situation but my gut instinct is so strong on this one. I think I would sue and just lose this friend.

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

Think of the LLC as a person.

Your formal business relationship is with the LLC. LLC closed down means good bye 5K. Proving intend to defraud is something you may want to discuss with a legal professional.

You stated that your friend has no business plan or strategy. So if you were to evaluate today what your friend brings to the LLC, what would you say?

As mentioned by others, 5k is more of a learning experience than an amount that is worth recovering unless there are intangibles that make it personally worthwhile for you.

Can you maybe expand on what he means by "if you quit the investment is lost"