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9/22/2017 12:11:25 AM
Posted: 8/10/2005 12:26:24 AM EDT
Any one know of any contracts for we can have this in paper. As well as rights to the company if it goes under or if he quits.
Link Posted: 8/10/2005 12:28:07 AM EDT

Originally Posted By olyarms:
Im going to be giving a friend a few bucks to invest into his buisness but I get a % of revenue



And the countdown to the end of the friendship has started.

sorry... just seen this movie before.
Link Posted: 8/10/2005 12:29:23 AM EDT

Originally Posted By DrFrige:

Originally Posted By olyarms:
Im going to be giving a friend a few bucks to invest into his buisness but I get a % of revenue



And the countdown to the end of the friendship has started.

sorry... just seen this movie before.



Indeed.
Link Posted: 8/10/2005 12:30:39 AM EDT
Hi Oly!

Don't do it if you expect a return on your investment. If it was a good risk, your friend would have no problem securing a loan from the bank.

If you can afford to lose the money and the friend, then go ahead.

Link Posted: 8/10/2005 12:31:36 AM EDT
The friendship is about to end, I hope you didn't value it much.

In whatever contract you do end up with, make it a percentage of the GROSS income, not net, and make records availavle for periodical review.

Either way, they're still going to try to hide some of it.
Link Posted: 8/10/2005 12:36:07 AM EDT
I have done such things in the past just not to this amount. When I could buy a car I want some paper work atleast if he fucks up and calls it quit for I have the legal right to take over.

Not going to loose a friend I have had a friend talk me into buying dinar's and I didn't end my friendship with him, I just don't take his advice any longer
Link Posted: 8/10/2005 12:38:13 AM EDT

Originally Posted By olyarms:
I have done such things in the past just not to this amount. When I could buy a car I want some paper work atleast if he fucks up and calls it quit for I have the legal right to take over.

Not going to loose a friend I have had a friend talk me into buying dinar's and I didn't end my friendship with him, I just don't take his advice any longer



Whatever you do, don't have it worded in a way that could make you seem like a business partner which would make you shoulder part of any financial screw-up he makes, should it happen.
Link Posted: 8/10/2005 12:38:43 AM EDT
Link Posted: 8/10/2005 12:39:51 AM EDT
Went into business with very good friends.

Ended up destroying the friendship (haven't spoken to them in 6 years and never will again) and left me around 25k in debt in the process because of it.

Have seen it happen with another pair of friends as well.

Figure out in advance which is more important. If it's the friendship do NOT get involved in business.

If the business is more important then mentally write off your friendship at the beginning and treat everything like you would dealing with a stranger with large amounts of money involved (in other words CYA every step of the way).

Sorry, wish I could be more upbeat but BTDT and have a the t-shirt.
Link Posted: 8/10/2005 12:40:57 AM EDT
[Last Edit: 8/10/2005 12:43:37 AM EDT by olyarms]

Originally Posted By bigscrun:
How much money?

Lawyer up.......


Quite a few clams.
Link Posted: 8/10/2005 12:46:48 AM EDT
Link Posted: 8/10/2005 12:47:53 AM EDT
Careful or you can end up with any debt he has too.
Link Posted: 8/10/2005 4:41:59 AM EDT
If you do this, you are an IDIOT!! plain and simple.

Very bad juju...i have owned two businesses and had to borrow money twice to have them.

Both times from friends or family. Worked itself out ok because of the people involved but there was tension there that i would not care to have again with anyone I cared about.

Essayons
Link Posted: 8/10/2005 4:46:11 AM EDT
if you're determined to do it....just execute a promissory note.

When he goes bankrupt, you can sell the note for pennies on the dollar
Link Posted: 8/10/2005 5:11:17 AM EDT

Originally Posted By 4xys2xxs:
If it was a good risk, your friend would have no problem securing a loan from the bank.


That is absolutely not true from what I've seen.

The owner of the company I work for has invested in about three dozen start-up or very small companies that I've handled all of the details for. Most had very good business plans and all looked like a good risk (or we wouldn't have dealt with them). Not a one of these businesses was able to get a bank loan even with us, a long time customer of a couple of the banks and a vendor to three of them, helping them with high-level contacts.

Out of the businesses, the best looking ones were the technical ones, but all of them failed through no fault of the business plan since it was due to customers that wouldn't pay. The rest have done well. The banks just weren't interested in loaning money even with a good business plan, owners/employees with experience in the field, and even with customers/contracts lined-up for several of the businesses.

As an example, for one of the companies that made buffing wheels I'm still shocked that they were turned down five times for a loan when they needed about $125k to start-up and already had two contracts that totaled over $300k in sales for the first year. The owner of my company loaned the guy $70k and the guy got a second mortgage for his house for the rest. The business now has about 40 employees, and the guy recently moved from his $40k mill village house into a $600k house on a lake. The owner and I (obviously) put together a very sound plan, but the banks just weren't interested in providing a loan.z
Link Posted: 8/10/2005 6:05:54 AM EDT
I have played this game before, cost me 14 grand. Be prepared to lose the money, all of it, period. If you cannot accept that risk, you should not invest. If you cannot separate business from friendship, you should not invest. Make sure you will not be liable for the business debt if it collapses.

What will you do with the business if it goes under? Sell the assets to recover your investment? You take over the company, and you will probably assume the business debt also. It may be cheaper to cut your losses and eat the investment.

"Quite a few clams" = lawyer up.
Link Posted: 8/10/2005 9:34:58 AM EDT
Yikes! I see bad things to come. Never loan money to friends or family. If you do decide to do this, consider it a gift, and if you actually do get something back, think of that as a gift to you.
Link Posted: 8/10/2005 9:38:15 AM EDT
Lawyer up!
Link Posted: 8/10/2005 9:54:50 AM EDT
Be sure you can keep an eye on the books. Make it a personal deal with him. If he has a corp, he can bankrupt and you are screwed. A personal note is just that. If he wants the money and has alot of confidence in the deal, then he will sign. If he has a problem with your terms, walk.

Try and get some collateral. His house deed is good.
Link Posted: 8/10/2005 10:06:08 AM EDT
Hmmmm there seems to be a common thought in this thread
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