Accepting Investments from someone PLEASE HELP!

Discussion in 'Growing and Managing a Business' started by jswebco, Jun 8, 2011.

  1. jswebco

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    Jun 8, 2011
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    I started a classified site and forum for gun sellers and collectors ect.

    I have only had the forum live for 4 days and already almost 200 members. It is doing really well and is a great niche.

    I have had probably 10 people email me asking to invest in my website because of the popularity and what I am doing with it.

    I have not the slightest idea on how to accept and what the terms should be. I do not want an attorney for this I just want to accept the investment but how does this work?

    How do they benefit? I was thinking that there be profit shared to all investors per how much they invested. Is this the right way to think?

    I wanted it to benefit them as much as possible but still leave a little benefit for myself.

    ten different people wanting to invest is tough to figure out.

    Any help would greatly be appreciated.

    MAN THIS IS HAPPENING SO SO SO FAST! 4 days live and 200 members already!


    I want to know how to accept the investments and what sort of contract I should have in place. How does this investment work?

    What do they earn from the site?

    I want to allow them to invest but still earn a bit myself. Also I want to pay them their investment back when I can from the site and still allow them to take a risk along with me.

    If anyone has an investment template or contract sample please let me know. I really need this as I cannot afford an attorney.
    #1 jswebco, Jun 8, 2011
    Last edited by a moderator: Jun 9, 2011
  2. Fergal

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    Nov 18, 2007
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    Welcome to Business Advice Forum jswebco and very well done on the rapid success of your website.

    It is great that you have received enquiries regarding investment but the first thing you really need to think about is whether you want or need that investment. If you were to take some investment for the site, you should first be clear as to how would you use that investment and how would the business benefit from the investment. In other words you should only consider taking on investors if you can use that investment profitably and not just because it has been offered to you.

    The three main questions an investor will want answered are;

    1. How much investment is required?
    2. How will that investment be used in the business?
    3. How will the investor get a return on their investment?

    If I was in your shoes I would do the following;
    • Do some research so that I'm very clear on the answers to the three questions above
    • Estimate what I believe the value of the business will be one year from now, two years from now and either in three or five years from now
    • Offer investors a share in the business, based on what I believed the future value of the business will be.
    Taking on an investor is a huge step for any business and it is a decision which will have a major impact on the business' future. Hence, if it is at all possible you should really get some professional legal advice before taking on an investor.

    Does all that help at all?
    • Like Like x 1
  3. Grumpy

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    Apr 7, 2011
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    I'd be very careful of the terms. Also, like Fergal, I'd only accept the investment if I thought it would benefit the business and help it grow faster. In your case, it would probably help you a lot with growing your business via advertising. You have to be careful about the legality of what you'll be advertising though.
  4. Daftblogger

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    Nov 23, 2010
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    jswebco I would be curious to give a look to your forum. Mind posting the URL?
  5. sigma

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    Aug 31, 2009
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    You shall considered that too many people invest on your forum mean you are losing the right of control
    I will suggest you to do some cost estimation, just accept maximum 3 investor, ask for the proposal from your investor and talk to them individually to get the best deal.
  6. Stephen Ryan

    Stephen Ryan
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    May 4, 2011
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    errr... 4 days and 200 members???
    If I was an investor i'd be throwing my money at setting up a competitive site to yours?
    Its not as if you have been around long enough to become entrenched in your market or anything!

    What is it they wish to invest in?
    Do you have some fantastic technology or something?
    Anyone can throw a classified site up in a niche.
    What is it they are interested in investing in?
  7. GekiDan

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    Jun 11, 2009
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    Anyone should be wary on investing on something online, especially if you don't personally know the person or business. And there are also times that even if you know them, there are still risks.

    Another thing is, would you invest an amount, big or even small, to someone with one post and you have only met online?
    I will leave the decision to you.

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