Is 33% Equity For $150,000 a Bad Deal?

**Gabriel_C** · 05-20-2010 07:57 AM

Hi, I'm so new to all of this, I met an investor interested in my project and in the contract I'm reading it says

"The Investor shall invest an initial sum not to exceed One Hundred and Fifty thousand Dollars($150,000) with the Entrepreneur for approved expenses incurred during the period in exchange for 33% Equity with the Entrepreneur. The total aggregate amount paid by The Investor to the Entrepreneur shall hereinafter be referred to as the “Funds.” "

Is this too much?

**akula** · 05-20-2010 08:15 AM

hahaha hii....this is gonna be a long thread..
first of all, before we talk valuation, who drafted the clause?

**Gabriel_C** · 05-20-2010 12:13 PM

Thanks for replying. I think this person is trying to scam me anyway, I had a feeling from the beginning, I let it get this far to see what would happen. The guys name (not sure if its his real name) is Ghali Imran Abdul. This is his site - imranfunding[dot]yolasite[dot]com

What is bringing up a red flag I put below

"The Investor will deposit $150,000 to the Entrepreneur after the Escrow Company has confirmed that they have received the Equity Deposit. As soon as the Entrepreneur confirms that He has received the deposit of $150,000 the Escrow Company will release the Equity Deposit to the Investor."

b.

The Entrepreneur shall deposit 1% of the One Hundred and Fifty thousand Dollars($150,000) i.e 4%÷100×$150,000= US$6000 to an escrow account as provided by the Investor as Non Securities Deposit and initial returns on investment before the release of investment amount.

**rogercbryan** · 05-20-2010 12:28 PM

This isn't mt realm of expertise... I think Akula will have the best info... I just have this gut feeling that this is something to stay away from... With out more info I'm not offering advice... I'm just stating my gut feeling.

**ciaossu** · 05-20-2010 06:37 PM

That is not how investments are done.

**akula** · 05-20-2010 07:41 PM

haha yea..it's an obvious "advanced fee" scam
..you're supposed to provide the 1.5k, and then he's supposedly gonna send you 150k...which obviously isn't gonna happen.
very successful scam..

anyways..not that it matters, but if you are interested, the way you can tell this is a scam is because the term "The Investor shall invest an initial sum not to exceed One Hundred and Fifty thousand Dollars($150,000) with the Entrepreneur" is nonsensical. investors don't invest with the entrepreneur. that's not who the cheque is written to. investors invest with the company the entrepreneur is starting. that's who the money is supposed to be sent to.

the scammer wrote the clause wrong.

p.s. unfortunately, he also forgot to change 4% to 1%. made a typo.
1% of 150k is not 6k

...tell this guy he needs to be more professional in his scamming!

Originally Posted by Gabriel_C

Thanks for replying. I think this person is trying to scam me anyway, I had a feeling from the beginning, I let it get this far to see what would happen. The guys name (not sure if its his real name) is Ghali Imran Abdul. This is his site - imranfunding[dot]yolasite[dot]com

What is bringing up a red flag I put below

"The Investor will deposit $150,000 to the Entrepreneur after the Escrow Company has confirmed that they have received the Equity Deposit. As soon as the Entrepreneur confirms that He has received the deposit of $150,000 the Escrow Company will release the Equity Deposit to the Investor."

b.

The Entrepreneur shall deposit 1% of the One Hundred and Fifty thousand Dollars($150,000) i.e 4%÷100×$150,000= US$6000 to an escrow account as provided by the Investor as Non Securities Deposit and initial returns on investment before the release of investment amount.