Investment offer

[Diggler]

I created a website about a year ago that is user driven and initially made it a free service for my local area that has taken off.

I got a call from someone who liked the idea and was interested in investing in the site and becoming a partner.

I already had plans to start earning money from the site by charging for certain services. The guy sees potential and wants to invest around £50,000 in the site and make it a ltd company. He is wanting to be the major shareholder and split the business 80/20 with me. He has similar plans for the online side of the business but he wants to create an offline telephone based side to the business. Without investment, I have no way of doing that part.

It is fairly risky and could either make it big or totally fail.

The site was my own idea and is sort of unique. I am worried about handing over 80% of my idea idea rather than losing out on the better half of the profits.

I am just after some general advice about what to do before he sends me the offer in writing. Is 80% a reasonable offer for someone who is wanting to invest in a business that doesn't make any money yet, but very well could with or without investment. Obviously it has the potential to make a lot more if it goes down the offline route, but without the investment, it never will.

 

[Anthony2oo5]

Id negotiate it, wouldn't accept the first offer. Don't forget he has lowered his price and raised the share knowing or thinking your going to negotiate.

Get back to him with an offer of something like £60,000 for 70%

 

[alfie]

That is a big share he wants. It's very hard to give a personal opinion without all the facts, but what I would ask you to consider is what is your revenue estimate of the site if you implemented your charging plans? In other words doing it on your own with the site.