Expert: Finance Guy - 4/1/2009

Question
I am currently writing up a business plan for a small start up business. I am a massage therapist and my start up is a therapeutic massage studio. I will be seeking an angel investor or posssibly a silent partner. There is also a person who is not a professional investor that is a possibility. We will be looking for $50,000. What would be proper arrangement and repayment schedule if we acquire an investor? What would be a proper arrangement if their investment bought them a percentage of the business? I have an vague idea but in general need help in this area. Any help in this area is much appreciated.

Thanks
Barry

Answer
Barry,

The scope of your question is too broad for a full discussion here.

You should talk to the investors and see what they are willing to do.

Obviously, it will be a proposition, based from their perspective.

Then, obtain an attorney and go over with that person what the benefits and potential problems are with their proposal.

Typically, an entreprenuer comes up with a proposal and goes shopping for investors.

However, if you already have investors that you know and trust,
try to work a mutually acceptable arrangement and then seek counsel to fine tune the arrangement.

Good luck.