100k in 4 months

[shawn0001]

Would you guys say that on a million dollar investement 100k return in 4 months to a potential investor is a good deal?

[malahverdian]

Does the investment continue beyond 4 months, to gain a lot more than a million dollars for that investor?

If not, then no, not at all.

[shawn0001]

sorry i should have explained it better, they would get their million back and plus 100 thousand

[malahverdian]

I understood that, but it is not nearly a big enough return to risk a million for an extra hundred thousand

[BusinessAdviser]

It all depends on the risk. If it is low risk, then it is a very attractive return for an investor. If it is high risk, it may not be.

[CDRamming]

My business mentor says "5x ROI within 4-5 years, or 3X in 2-3 years". Especially when seeking from a VC, less from an angel. It seems high, but having money tied up, you want a high return. With 4 months it will be less, but I would assume pro-rating my mentors idea that you would need to return $1.3-$1.4 million. Also risk comes into play as jmenq2 says.

[akula]

Would you guys say that on a million dollar investement 100k return in 4 months to a potential investor is a good deal?

that's about 30% p.a.
index funds are returning about 20-35% and they're safer, cheaper and more liquid
in that sense, given the current market, private equity has a hurdle rate ~ 50-60%
...but, you have to realise that no one with any kind of work experience goes around offering investments with a 4month holding period. you're advised to reassess any kinds of day dreams and delusions that you may be having

[shawn0001]

its not a daydream its a guaranteed return, how else could you make a hundred thousand in 4 months with absolutely no risk?

[shawn0001]

Haha "you're advised to reassess any kinds of day dreams and delusions that you may be having" who is this guy?

[BusinessAdviser]

its not a daydream its a guaranteed return, how else could you make a hundred thousand in 4 months with absolutely no risk?

How is it guaranteed? And if it's guaranted (meaning zero risk), why are you offering such a high return?

[moose3511]

In My opinion if you have 10000000 then you put 1000000 on the line for 1 year then a guarantee of 10% in one year compounded would be ok. Unless you could make more.

[JMI]

its not a daydream its a guaranteed return, how else could you make a hundred thousand in 4 months with absolutely no risk?

I hope you realize that you aren't the first to say something along those lines, and I can guarantee you that you wouldn't be the first to regret it. I'm not trying to say anything negative here, but statements like that are very scary, especially when you start talking 7 digits. Nothing is no risk. There is a risk that you could slip and break a leg getting up to go grab a snack from the fridge after reading this, so don't say that a business venture is guaranteed with no risk.

Again, I don't mean to sound harsh or rude, but I have to agree with Akula. Unless you would like to elaborate on your business plan, when someone gives you facts, you shouldn't snap back at them, especially people that have been around a lot longer than you.

As per your business plan, actually if you wouldn't mind elaborating, how do you plan to generate a $1,100,000 in 4 months? Assuming you are using the million originally for expenses, do you plan on making gross revenues of over 1.1 million, let alone net revenues, in the next for months? If not, you are losing a lot of money. A LOT of money.

Please understand that we are just looking out for your interests here, we don't mean to put you down in any way. We just want you to understand the gravity of what you have in mind.

[CDRamming]

The company I am currently planning requires around $750,000 to operate for the first year. But I reassessed how I could do this, because investors were seeking too high of a return. I found that by leasing my equipment and initiating prior contracts with customers to pay on delivery of service that I can open for as little as $50,000.

I have this much in a trust fund which I will invest myself. Also if I want to seek further financing I can show an investor that I am putting $50,000 of my own money in, which will give a greater confidence in my own business.
I don't know what your business is, but if you gave us a general idea we could come up with some ideas to reduce your initial costs.

[Gaulkin]

You want the best return? All on red, and it only took 2 minutes.

[BusinessAdviser]

You want the best return? All on red, and it only took 2 minutes.

That doesn't make much sense to me. You could get a higher return by putting it all on, say, 14.

The point here is that there is a HUGE difference between a "high" rate of return and a "good" return.

I submit that a "good" return (related to your "best" return) is where the rate of return is maximized RELATIVE TO THE RISK. If that's the case "all on red" doesn't sound like the "best return," let alone even a good return.

Example: Put $1000 on red. A winning bet on red pays 2:1. There's a 42% (16/38) chance of winning and a 58% (18/38) chance of losing. Thus, the expected return is ( ( ($2000 x 0.42) + ($0 x 0.58) ) - 1000 ) / 1000 ) or -16%. And it only took two minutes. Doesn't sound like the "best" return to me.