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shahab6

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#1

Getting an investor question.

02-09-2008, 09:04 PM

I have website, and I want to find investors to invest money in it. How does it work, let's say they invest $10,000 in the website, and let's say the website ends up making $30,000 a year in profits. how much of that money do I have to pay to the investor?? Is it half of it? And for how long do I have to pay that to the investor, or that depends on the contract? Also let's say it doesn't make any money the first year with the money he invested, it's actually lose money. Then what happens?

Let's say the website is already making money, but the money the person invested brings in no extra profit.
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After Shock Media

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#2

02-09-2008, 09:06 PM

Your going to need a bigger boat.

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shahab6

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#3

02-09-2008, 09:10 PM

Originally posted by After Shock Media

Your going to need a bigger boat.

what ?????????
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woj

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#4

02-09-2008, 09:34 PM

It's whatever agreement you reach with the investor, but I would imagine investor would want some equity in the project... so certain percentage of profits going to them forever, unless down the road you buy them out...

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woj

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#5

02-09-2008, 09:34 PM

so which site do you need 10k for anyway? what do you need the money for?

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shahab6

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#6

02-09-2008, 09:54 PM

Originally posted by woj

so which site do you need 10k for anyway? what do you need the money for?

For my credit card website, I was thinking to put the money into paid advertisement such as buying Links,PPC, SEO advertisement, and other form of advertisements. Basically try to being on the first page of Google, yahoo and MSN for hundred of credit card related keywords.

But I don't know what will happen if that idea fails, will the investors sue me?

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Barefootsies

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#7

02-09-2008, 10:54 PM

Sounds like you are way out of your league ace.

No offence buddy.

Any investor is going to want to make sure there is a return. That could come from thier direct involvement. Or you handling over the domain for them to 'hold' and/or host on their servers of choice.

I know I would. So there is no way you were going anywhere. As for return... it would depend on your operating agreement. If it was going to be a money maker, and "investor" is looking for long time return. So they are not going to float you cash in the short term, and once you are banking, just step aside.

You will need to either buy them out, or get ready for a life long partner. Again this is something that you should have IN WRITING prior. So you know if they are going to be up in your kitchen for years, or you might be able to cash them out.

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#8

02-09-2008, 10:56 PM

For the cc site in your sig?
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#9

02-09-2008, 10:59 PM

hey don't knock the man, he's what we all once were, budding entrepreneurs.

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PornMogul

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#10

02-09-2008, 11:17 PM

Im looking for a couple investors too for a couple sites but I actually understand the principles of business unlike the original poster. Hit me up!
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Vick!

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#11

02-09-2008, 11:35 PM

Originally posted by shahab6

For my credit card website, I was thinking to put the money into paid advertisement such as buying Links,PPC, SEO advertisement, and other form of advertisements. Basically try to being on the first page of Google, yahoo and MSN for hundred of credit card related keywords.

But I don't know what will happen if that idea fails, will the investors sue me?

I've some experience with credit card sites and generating leads .. if you are thinking to invest in PPC advertisement, you cannot be sure of ROI unless you have some working credit card campaigns. Unless an investor is a moron, he wont invest without some proof of positive ROI generated in past.

For example, you invested $100 on PPC and generated 4 leads of $50 each and made $200 .. but the problem is you don't have $10k to invest and make $20k ... this way you can find investor. But if you are simply "planning" to use some techniques (SEO, PPC) you have no proof of past success, forget getting an investor.

As for suing you after being unsuccessful, I'd say NO .. since most of the times this thing is discussed and mentioned in contract.

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Vick!

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#12

02-09-2008, 11:59 PM

Originally posted by PornMogul

Im looking for a couple investors too for a couple sites but I actually understand the principles of business unlike the original poster. Hit me up!

Is it something other than camkingscash?

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Nookster

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#13

02-10-2008, 12:03 AM

Sounds more like you need a loan. Go up that alley instead imo.

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#14

02-10-2008, 06:42 AM

Go on the Dragons Den TV show!

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shahab6

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#15

02-10-2008, 11:21 AM

Originally posted by Vick!

I've some experience with credit card sites and generating leads .. if you are thinking to invest in PPC advertisement, you cannot be sure of ROI unless you have some working credit card campaigns. Unless an investor is a moron, he wont invest without some proof of positive ROI generated in past.

For example, you invested $100 on PPC and generated 4 leads of $50 each and made $200 .. but the problem is you don't have $10k to invest and make $20k ... this way you can find investor. But if you are simply "planning" to use some techniques (SEO, PPC) you have no proof of past success, forget getting an investor.

As for suing you after being unsuccessful, I'd say NO .. since most of the times this thing is discussed and mentioned in contract.

very helpful info, thanks
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#16

02-10-2008, 11:40 AM

Originally posted by shahab6

very helpful info, thanks

you're welcome.

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#17

02-10-2008, 11:55 AM

why dont you loan 10k from the bank and dont invole anyone you do not know?

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#18

02-10-2008, 11:59 AM

Originally posted by shahab6

For my credit card website, I was thinking to put the money into paid advertisement such as buying Links,PPC, SEO advertisement, and other form of advertisements. Basically try to being on the first page of Google, yahoo and MSN for hundred of credit card related keywords.

But I don't know what will happen if that idea fails, will the investors sue me?

Say goodbye to your money.
No offense but you really don't sound like you have a clue what you're doing.
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shahab6

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#19

02-10-2008, 02:13 PM

Originally posted by Rockatansky

why dont you loan 10k from the bank and dont invole anyone you do not know?

I just wanted to know how it will work out, I don't need investor right now,(unless I want to do something very big, then I will get investor)

Plus if I needed money I will go to my family, and get the money not the bank.
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shahab6

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#20

02-10-2008, 02:17 PM

Originally posted by Dirty F

Say goodbye to your money.
No offense but you really don't sound like you have a clue what you're doing.

no I do.
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#21

02-10-2008, 02:59 PM

It's illegal to offer securities to the US public without being registered with the SEC.

I suggest you contact the US Securities and Exchange Commission before offering any securities on the internet.

http://www.sec.gov/

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#22

02-10-2008, 05:28 PM

Ten years ago or more, a study showed:

Deals under $500,000 are funded by friends and family in 95% of the cases.

Deals over $500,000 usually involve existing businesses with proven management and revenue, and are funded by institutions in 95% of the cases.

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#23

02-10-2008, 07:03 PM

I wouldn't be borrowing from family or friends unless you are 100% confident you'll be able to pay them back in some other way if you use up all of their funds and come out with nothing. Better to max out your CC and not have to lean on people around you.
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#24

02-10-2008, 07:23 PM

Originally posted by DaddyHalbucks

Ten years ago or more, a study showed:

Deals under $500,000 are funded by friends and family in 95% of the cases.

Deals over $500,000 usually involve existing businesses with proven management and revenue, and are funded by institutions in 95% of the cases.

18 years ago a study was conducted to learn the percentage of statistics that were made up on the spot, which were made up a long time ago, and which were real.

98% of those results are now used in 34% of all contracts signed across 64% of the world, while the other 2% are revealed in only 18% of the actual publication.
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#25

02-10-2008, 07:38 PM

The money should be put back into the business for atleast 12 months. After that time then everyone gets their cut. 30% you, 30% company/website budget/40% him.

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#26

02-10-2008, 07:58 PM

Originally posted by shahab6

I have website, and I want to find investors to invest money in it. How does it work, let's say they invest $10,000 in the website, and let's say the website ends up making $30,000 a year in profits. how much of that money do I have to pay to the investor?? Is it half of it? A

sounds like you aren't setting up the more traditional investor scenario of forming a new company or using an existing company structure (ie. LLC or C/S corp) and selling shares.

what you might be doing (for simplicity) is essentially a partnership agreement that is a rev-share agreement.

The investor puts in $x dollars and they get y% of the profits (which means after all expenses are taken out, along with taxes, hold backs for expansion, etc).

This would be a "partner" because they are splitting the profits with you at some agreed upon split (ie. 50/50, 30/70, etc).

You can set the terms of this partnership to be like:

- once they have made their money back from the profit sharing, the profit sharing will last for x years/months after that point.

- the profit sharing extends for as long as you are running the business.

You can basicaly define the terms for you and your investor. You will need to write it down, and it becomes a contract that you both sign.

it is wise to have an attorney review the terms, once you and your investor have come to your mutual agreement.

Lawyers fees will cost couple hundred bucks.

$30,000 is not alot of money, so better off looking towards family members that you can get the money as a loan, and repay the principal + interest back (at like 12% interest) and then not having to worry about "investors".

If you aren't confident in your ability to make the money back, then taking someone's money needs to be highly thought out.

A loan structure means you are sharing the risk, because you have to pay it back.

There is no simple anwer to your question, as it all depends on what you and the investor are willing to do and agree upon.

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#27

02-10-2008, 08:18 PM

Originally posted by FightThisPatent

Fight the loan sharks!

Hence my first reply and what came off as a lack of experience in these matters. Seems though that nobody got the joke.

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#28

02-10-2008, 08:33 PM

It's whatever the agreement is between you and the investor. Is this someone who is used to investing and if so what types of investments has he done in the past. Typically they will want to see a business plan that is geared towards an investor. He is gonna want to see that:

1) you have a history of being successful
2) why is this a good investment for him (remember, investment is primarily about risk and return)
3) how much control does he have (the more control he has the less risk in his eyes)

I suggest reading Robert Kiyosaki. Guide to Investing and Other People's Money are both good books.

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PornMogul

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#29

02-10-2008, 08:40 PM

Originally posted by Vick!

Is it something other than camkingscash?

Ofcourse
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Pleasurepays

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#30

02-10-2008, 08:45 PM

Originally posted by Dirty F

Say goodbye to your money.
No offense but you really don't sound like you have a clue what you're doing.

really? just because he plans to rank number 1 in google for some of the most competitive and valued terms online today or dive into PPC for some of the most expensive keyword campaigns with no experience and with other peoples money?

it all sounds perfectly reasonable to me. i think his free template from the sponsor is a sure winner.

Last edited by Pleasurepays; 02-10-2008, 08:47 PM.
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shahab6

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#31

02-11-2008, 12:50 PM

Originally posted by Pleasurepays

really? just because he plans to rank number 1 in google for some of the most competitive and valued terms online today or dive into PPC for some of the most expensive keyword campaigns with no experience and with other peoples money?

it all sounds perfectly reasonable to me. i think his free template from the sponsor is a sure winner.

Let me make this clear, I'm not looking for investor,just wanted to know how it works.
Second I been running that website for 2 years.
third I have been on google and yahoo first page for 120 different keywords, but that last only 3 months, but here and there I do come on google first page for some keywords.

forth the template is nice, and that doesn't matter, as the info on the website gets updated daily.
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shahab6

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#32

02-11-2008, 12:51 PM

also thankyou FightThisPatent for your good info.
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