Forums: Discussions for entrepreneurs and small business.

I started a company in March in an effort to break away from the corporate world forever.  However, going on my 4th month I have made next to nothing thusfar (due to the economy and my shoestring marketing budget) and am living off savings.  I have been approached by someone who I believe is willing to invest in my business.  But his initial offer was such a small amount, and he wanted to be 40% owner.  I think he was testing me with that and will likely increase is offer.  He has a lot of knowledge and contacts and could help me grow the business.  But do I want him to be a 40% owner with such a small initial investment?  On the other hand, if things don`t improve immediately, I will have to go back to work full time and just run the business part time.  So what to do?  I don`t know this person well, so it would be a leap of faith.  What kinds of questions should I ask before allowing him to become a 40% owner in the LLC? 

Thanks,

Jeff

Jeff,

Will this person be an active "partner" in the business or is he just investing?

Do you share the same vision & purpose for the company?

Do you have the same core vales?

Why do you think this capital will make an big difference in the results? (if the economy is the issue - more capital won`t change that)

If you decide that this person would be an asset to the business - then you need to define the terms of the exchange.

 

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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

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Tracy Barnhart, Owner
Giverny, Inc. / Mini Me Geology
http://www.GivernyOnline.com
http://www.MiniMeGeology.com