Investor Help (but not investment from you guy's)

[Tam]

A friend wants to invest £15k in a new business venture and maybe help
out one day per week, for this they would like (assuming the business
is doing well) a guaranteed annual return, they don't want it based on
percentages. I am having trouble on what I should offer them, any ideas
on what I should offer and over how many years?

Tam

[profitxchange]

I would imagine they would expect something a lot better than a conventional loan interest - why not ask them?

They must have some expectation.

If they are making an added value contribution to the business that could be classed as a wage/salary - whats the going rate for an emplyee of their calibre?

Perhaps even keep the two elements separate.

[Tam]

I would imagine they would expect something a lot better than a
conventional loan interest - why not ask them?
Dilemma: They don't want to ask for too much and I don't want offer too little :?

I was thinking of maybe £25/30k over 5/6 years for their investment
and a separate wage/salary for their work?

Does this sound fair?

Tam

[profitxchange]

I would say that would be very acceptable

You do not have to cast it in stone

Allow for an annual review?

I might even start a bit lower don't cripple the business with too higher outgoings. you can always give them a bonus if all is well.

Good luck

[Tam]

Thank you,

I'll work it along those lines and see what happens :wink:

Tam

[DuaneJackson]

Work out on paper how much extra revenue their 15k will bring you if you perform a little below your expecations. Use that as a guide. Whatever you do, don't pluck figures out of the air.