Investing in a person rather than business

[simplejack]

I have a lot of research to do still, but any input on my questions and ideas would be appreciated.

I've had the idea of looking for somebody to invest in me rather than a business. I would use the money to help with my life, start multiple businesses, and start multiple non profit organizations.

I need to think through things more to come up with further questions related to this, but here are the ones I've thought of so far:

1) What restrictions govern contracts and return on investment options?

I've been wondering if there would be any problem having different percents of profits returned based on how much money is made, possibly also with some limit. Also I didn't know if I could add something saying if I didn't follow some requirements all remaining money and assets would have to be returned, if desired by investor.

2) Are there downsides to investing in a person rather than a company from an investors standpoint?

3) What would be good options where an investor could invest an amount and still maintain control of how much is released and when?

4) Would there be a better investment option than having someone invest in me given the fact I would use (and make clear to them) a good chunk of money for myself and also wouldn't be sure exactly how much would be needed for each created entity?

5) What should I read or who should I talk to so I can figure out good ways to go about sharing resources between entities? Examples would be if I used the same home office, company car, servers, etc for multiple companies that I own. Would I just pick one to take each deduction on and then allow the other companies to use the things for free?

6) Where should I look to learn about tax related concerns investors would likely have to consider?

[Aletheides]

They call that a loan. Go to a bank or Prosper.

[YoungCash]

I have a lot of research to do still, but any input on my questions and ideas would be appreciated.

I've had the idea of looking for somebody to invest in me rather than a business. I would use the money to help with my life, start multiple businesses, and start multiple non profit organizations.

I need to think through things more to come up with further questions related to this, but here are the ones I've thought of so far:

1) What restrictions govern contracts and return on investment options?

I've been wondering if there would be any problem having different percents of profits returned based on how much money is made, possibly also with some limit. Also I didn't know if I could add something saying if I didn't follow some requirements all remaining money and assets would have to be returned, if desired by investor.

2) Are there downsides to investing in a person rather than a company from an investors standpoint?

3) What would be good options where an investor could invest an amount and still maintain control of how much is released and when?

4) Would there be a better investment option than having someone invest in me given the fact I would use (and make clear to them) a good chunk of money for myself and also wouldn't be sure exactly how much would be needed for each created entity?

5) What should I read or who should I talk to so I can figure out good ways to go about sharing resources between entities? Examples would be if I used the same home office, company car, servers, etc for multiple companies that I own. Would I just pick one to take each deduction on and then allow the other companies to use the things for free?

6) Where should I look to learn about tax related concerns investors would likely have to consider?

Not to shoot you down here... I've even had the same thought myself, but the only people that do what you have described above are moms and grandmas. Your own, that is.

[Sean_Rushforth]

This has been done before on the Dragons Den, I can remember Theo investing in a young entrepreneur called Christian Lane and his Foldio product, but Theo invested in 'Christian Lane' rather than just the product which included all his future investments/ideas. I'm not 100% but I think Peter Jones has also done something similar.

It's not something I'd like to do. If you think you've got the flare to be a serial entrepreneur why give up a stake in all your future businesses when you could get the investment for one. Why not reinvest profit from your business into new ventures without giving up equity, the initial stake you gave away could potentially be worth a fortune over 5/6 companies.

[simplejack]

I don't have the ability to get a loan from a bank or from any friends / family. If I did, that would be my preference. I tried to get my Dad to loan me money, but he hasn't been working for a while now.

If I did get a personal investment, I definitely wouldn't have to leave it open ended on the time period. Maybe just a year, or two at the most. I would also want to put a cap on the max money that could be returned.

I may be best off just working for a little while saving money to fund things myself. It may be too difficult to find the right person to invest in me. I just got thinking yesterday I could speed things up a lot with an investor. On the other hand I suppose it could be more rewarding doing everything on my own without help.

Also with looking for an investor I would likely look for someone more interested in making a difference with the investment rather than a financial return. In that case the contract would also cover things along the lines of guidelines that would have to be followed and consequences of not doing so. I guess I'll do some searching on google about contracts.

Thanks for the replies guys. I'll have to lookup the names Sean mentioned.

[TheRule]

Law 13 - When asking for help, appeal to people's self interest, never to their mercy or gratitude.

You MAY find somebody out there who would invest for a cause but in general your MUCH more likely to find an investor by appealing to their self interests. People won't come out and tell you they WON'T invest because of the non-profit because they want to APPEAR gratuitous but deep down they want profit.

[simplejack]

I agree with that in looking for an investor. The reality though is I don't need one. Ideally I would want to find someone wealthy who is doesn't have any financial worries and is more concerned about the future of the world. I guess the reality is it would be a lot easier to find a regular investor though.

[dragons.den]

Hi,

I definately think the person themself is extremely important to a business or idea.

I think any investor will look at the person making the proposal and to an extent it can be a deal clincher, although i feel it's more likely to be a deal breaker

An investor is more likely to turn down a good idea because they dont think the person has the right attitude or that they are doing it for the wrong reasons than investing in a person who doesnt have anything to offer at all except the promise of great ideas.

For sure you can 'buy into a person' but to do that you need ideas to buy into, even if they arent perfect. An investor will then see something they like i.e. your enthusiasm, motivation etc. and the potential you have to grow on ideas you have and to come up with somethin brilliant!

i cant see anyone wanting to invest in someone just because they say they have loads of good ideas

Best of luck!

[simplejack]

Agreed, although I was mostly asking about what kind of return on investment would look attractive. No sense in offering too much.

I know I have to work on coming up with something more concrete. At the same time I like having flexibility. I should be able to come up with a plan that is both solid and flexible I hope.

Many investors would shoot me down right away. Afterall I am a highschool dropout with no experience running any businesses before. It's just a matter if I can find someone with the right intelligence, wisdom, and open mindedness. I think it's possible, but I wouldn't say it's likely.

[simplejack]

Woops, sorry, I thought you had replied to my other thread. Disregard my comment about mostly asking about return on investment.

Thanks. I'm sure everything will work out fine.

[akula]

jack, let me help you by clarifying things: your question is nonsensical and has no answers because its nonsensical

the problem I'm seeing is that you're confused about how to start your career in entrepreneurship. this problem is exasibated by the fact that you're coming across words like "investor", "contracts", "downsides", "expected rate of return" etc which ought not to be in your vocabulary because thinking about these words and using them will serve you no purpose at this stage of the game
the solution is for you to reflect on the basics of what entrepreneurship is and what entrepreneurs do. entrepreneurs create value by solving other people's problems. find some people. identify their problems. figure out some solutions. get some surveys filled out and everything else will start to fall into place...including financing, management and legal

[simplejack]

I understand fine what an entrepreneur is. I seem to be a natural one. Sorry if I confused things with thinking my reply to dragons.den was on my other thread. Thank for taking the time to reply though.