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Found Partners - now what?
George Jetson




msg:3689485
 2:55 pm on Jul 3, 2008 (gmt 0)

I have been mulling this over for days and I can't seem to move forward.

I found partners for multiple carpooling web sites; however the money invested is very little ($5,000) and I don't feel this is enough. Yes, $5,000 is a good start; however to buy in at $5,000 for a possible return of much more just does not seem fair?

My business plan is 90% solid and it demonstrates a huge return. In addition, I have some very good domain names that match the site's content.

Should I give a Promissory Note or allow a buy in at $5,000. The return will be 10 x if all works out. Also,is it possible to promise a percentage of ad revenue until the note is PIF with interest of course?

Thanks in advance.

 

lexipixel




msg:3690538
 3:31 pm on Jul 4, 2008 (gmt 0)

Reward should equal risk.

If you're just looking for capital, borrow it and pay back with interest.

A "partner" should be planning on sharing any risk that comes up, (e.g.- putting in additional money if needed, putting in time or other resources), and ultimately be aware they are "risking" their investment and could lose some or all of it.

Essex_boy




msg:3690603
 4:55 pm on Jul 4, 2008 (gmt 0)

Never go into business with a friend or a relative.

Always stick to your guns if you think your right.

George Jetson




msg:3690607
 4:56 pm on Jul 4, 2008 (gmt 0)

That's what I thought too and I appreciate the excellent reply.

If the investment is for partnership what % of the partnership should I give? My initial business plan asked for immediate $19,195; however they obviously came up short. Should I take the $5,000 and see it as a down payment and ask for more later when needed?

Thanks in advance.

George Jetson




msg:3690609
 4:57 pm on Jul 4, 2008 (gmt 0)

It's not a friend - just an acquaintance. :)

buckworks




msg:3690634
 5:43 pm on Jul 4, 2008 (gmt 0)

If you don't have the resources to launch the project on your own, you'll have to obtain them from somewhere, or else modify the project.

What alternatives do you have besides taking on a partner?

however to buy in at $5,000 for a possible return of much more just does not seem fair

If their buy-in enables you to produce something much more lucrative than you could have on your own, it's perfectly fair.

George Jetson




msg:3690646
 6:10 pm on Jul 4, 2008 (gmt 0)

Trust me - it's a tough decision; however. The outcome could produce huge money. One website has already been featured on three major networks and radio. I need the additional monies becasue the project has become more complicated and I need to hire an additional programmer too. Also, I want to form an LLC to cover my butt.

So - ultimately 3 partners (including me) we split three ways. Is that fair? I think they should come up with an additional $3,000 too - since the plan called for $19,000.

I have put a lot of sweat equity into this project and I won the domains.

Thanks.

George Jetson




msg:3690648
 6:11 pm on Jul 4, 2008 (gmt 0)

*Own the domains and not Won. LOL

buckworks




msg:3690685
 8:06 pm on Jul 4, 2008 (gmt 0)

You need advice from a lawyer with solid experience in setting up business partnerships.

Give careful thought to exit plans for everyone.

George Jetson




msg:3691207
 5:53 pm on Jul 5, 2008 (gmt 0)

I have set-up a preliminary exit plan and I am also showing what the existing sites are worth today.

I can't give too much away; however our plan is to build multiple sites (approx. 100) and place local ads on each site.

How does one determine what his sites are worth? Is there a formula? Can/should I include the sweat equity that I put into creating the existing sites? I mean if they're buying into an existing project that is successful; I would think my hard work is worth something too.

Thanks in advance.

aspdaddy




msg:3691549
 12:15 pm on Jul 6, 2008 (gmt 0)

Untill you have a legal company formed with x amount of shares its not possible for investors to buy any share,there is nothing to invest in other than your ideas. $5000 is not an investment its not even a months wages for one person. Why not seek a business loan instead as part of a new business start-up?

George Jetson




msg:3691578
 1:55 pm on Jul 6, 2008 (gmt 0)

My credit score is low and I would not qualify.

I have a corporation already established and was debating giving stock (worthless now) to the investors/partners.

George Jetson




msg:3691579
 2:07 pm on Jul 6, 2008 (gmt 0)

I really appreciate the replies; however for the little investment this is getting too complicated. Maybe the partners should have shake hands agreement and move forward with this project?

Agree that you get x amount of dollars from revenue and I get x amount of dollars from revenue - shake hands and move forward.

Time is a ticking and I need to move forward quickly.

limoshawn




msg:3697148
 4:10 pm on Jul 12, 2008 (gmt 0)

Someone once said that "it's not hard to find money for a good idea" and I'll add that it should be REAL EASY to find 20k for a good idea!

2 things come to mind, either you need to look a little harder for the money you want or you need to keep working on the idea.

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