Forums: Discussions for entrepreneurs and small business.

Hello SUNies,
I am stuck on a very serious matter, here. As you know I Incorporated my company and have been looking for investors.
I finally have an investor that, is willing to invest but I don`t know how to handle this. Should I sell company stocks? How do you set the value to your stocks? How do you know what the price of each stock is? Do you just say OK, I am going to sell you company stocks at 1,000.00?
What do I do?
Please help.

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Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

Edgar,

Basically there are 2 ways to go.

1. The simple (yet ultimately expensive way) is to "negotiate" a deal based upon what you and the investor can agree upon.

2. The more complex  way is to establish a valuation for the company and build an investment offer from there.

Generally, the second approach requires some professional assistance or previous experience in the process.

Robert Johnson

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

thank you.. can you please elaborate more on both.. if you may.. sounds interesting. So basically on #1. I set my price and it`s up to the Investor to say yay or nay?

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Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

You see the dollars is a good indicator to tell you when to buy and when not to buy.

You can play with the dollars and make more profit .There is always a place to buy because when one go up the other go low.Import Export it is a good example.

Edgar,

Generally, the first approach involves one of you making a "first" offer - the other party counters and negotiations ensue. If you pick a $ amount that you are unwilling to change - then the result would be a "take it or leave it" situation. If you are only going to have one investor - this approach might be OK. Even so it is frequently challenging to get to agreement with both parties feeling they have been fairly treated.

If you want to discuss specifics- contact me privately.

Robert Johnson

 

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Selling stock for a new business is pretty difficult.

Selling stock is almost like taking on partners. In being incorporated, any stock holders that you have are part of your board of directors in essence and have a say in the operation of your business.  My personal oppinion is to try to find angel investors before selling stock, plus, the longer you go before selling stock and the more profit you make gives better investor odds. The more your net worth, the more you can charge per stock and the more appealing your stock will be to the investor.

Engraver,
Here is the thing. I been in business for almost 5 years now. I incorporated the business not long ago. Selling stock has been something I`ve been contemplating to do for quite awhile. I have a Networth of around 45-55K a year. I know it`s not alot but for what I had, when I started the business trust me I am well of now. I started my business with a $200.00 dollar Credit Card on one hand and a lay off slip on the other..

The person that wants to invest in the company is an angel investor, and I was going to make him be the vice-president. I want him to know where his money is going. I am not affraid of doing this because he would only be vice-president for one of  the divisions...

so for say the corporations legal name is : "Hispanic Marketing Strategies Inc." with 2 dba`s being Nuevolution, Nuevohost. he wouldn`t invest on HMS Inc. but rather on Nuevohost per say. This is why I am not to worried about the horror stories, or wonder if I am going to be on the same band wagon as Steve Jobs... "Got fired from Apple" ...
What do you guys think of this move?? Feasible or not?


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Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

As a friend Nuevolution I would tell you to focus on your idea and in the other hand ask garanty protect your self ...

See you focus on your idea and find more info...

Edgar,

With all respect to all the folks who are tyring to help you by offering their input - much of which is opinion and/or myth.

You need professional advice on this issue. There are a number of things that need to be taken into consideration -including the best way to consumate your deal. An improperly done deal has long term effects that can create headaches well into the future.

Yes, as professional business advisors - this is the type of service we provide - but if that is an issue, I`ll be happy to give you the names of other folks who can and will help you. Just send me a private message.

Robert Johnson

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

This is a question..Can it be handled like that? why would it be inproper? Please elaborate?

-------------------------

Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net