Someone wanted to invest 30k into my landscape company for 5% return, now I’m not the smartest guy out there and someone is free to correct me if I’m wrong but shouldn’t that 5% be until the loan is paid off and not until I give the company up

Again I’m very new to this so I could be looking at this horribly wrong

  • OldOrchard150@alien.topBEnglish
    1·
    1 year ago

    . If you made 45k last year, your business is probably worth 150k max. If you do most of the work, it’s probably worth less. But this guy thinks it’s worth $600k. Something is wrong. I don’t know what.

    So, if he gives you 30k now and then you sell a week later for 150k, he gets 7.5k. Makes no sense at all.

    But also, equity also means nothing if you never sell the business, meaning he gets to keep the money and never has to give anything back to the investor. Most small businesses are worth $0 equity as they have basically $0 potential to be sold for any reasonable amount in the future.