Private Business Investment
June 1, 2011 5:17 PM Subscribe
I've worked for you - now I may like to give you some money.
I've been working on and off for a year at sister companies (Company x and Company y) while running several businesses on the side. In an effort to streamline my life I have ceased the businesses and would now like to invest some money in an existing small business. It is a risky investment but I am a big supporter of small business and see the injection of funds into a growing small business run by capable people as being a productive investment.
I currently do not work at either company but Company Y has had interest from potential backers and seems to be in a good position to go forward quite quickly (they are a young company with a great product). They've expressed interest in hiring me for part-time work.
Company X is older but they were the company I started working for initially. Their product is also great but it's a harder sell because it's more innovative. I think it just needs more time to gain momentum. This is the company I would invest in. I know they are all look for venture capital, but even a small private investment (which is all I am in a position to offer) would give this company in particular a useful push forward.
I guess I am concerned because I have given them no indication that I am in a position to invest at all (I am a late 20s woman, the industry is tech). The work I have mostly been doing for them has been quite level entry so I think this - coupled with my interest in doing further work - might come across as a little strange. Nonetheless the MD does know that I have worked for myself and that I am interested in small business. Both companies work out of a shared office space and have an overlap in some directors.
Am I stepping into a bucket of awkward or I am overthinking this (because money is money)?
I've been working on and off for a year at sister companies (Company x and Company y) while running several businesses on the side. In an effort to streamline my life I have ceased the businesses and would now like to invest some money in an existing small business. It is a risky investment but I am a big supporter of small business and see the injection of funds into a growing small business run by capable people as being a productive investment.
I currently do not work at either company but Company Y has had interest from potential backers and seems to be in a good position to go forward quite quickly (they are a young company with a great product). They've expressed interest in hiring me for part-time work.
Company X is older but they were the company I started working for initially. Their product is also great but it's a harder sell because it's more innovative. I think it just needs more time to gain momentum. This is the company I would invest in. I know they are all look for venture capital, but even a small private investment (which is all I am in a position to offer) would give this company in particular a useful push forward.
I guess I am concerned because I have given them no indication that I am in a position to invest at all (I am a late 20s woman, the industry is tech). The work I have mostly been doing for them has been quite level entry so I think this - coupled with my interest in doing further work - might come across as a little strange. Nonetheless the MD does know that I have worked for myself and that I am interested in small business. Both companies work out of a shared office space and have an overlap in some directors.
Am I stepping into a bucket of awkward or I am overthinking this (because money is money)?
This post was deleted for the following reason: poster's request -- jessamyn
Investments in companies are pretty complicated. If it's a very small amount of money it may not be worth it for the company to take on the responsibility of having a (no offense) unsophisticated investor. High end VCs offer more than money, or at least the good ones do. They also give publicity, expertise, contacts, help with recruiting needs, exit strategies, etc. They also understand all the tax and reporting responsibilities and will liaison well with the upper management. I'm not saying it's impossible, but that's where the company's coming from.
posted by 2bucksplus at 5:31 PM on June 1, 2011
posted by 2bucksplus at 5:31 PM on June 1, 2011
mleigh, I don't like talking about money either, so I get where you are coming from, but really, if you are going to post a question like this the amount of money matters. "Low end of the scale"? When you have written "I know they are all looking for high-end venture capital"?
Does that mean $75,000 or $7,500?
posted by mlis at 6:29 PM on June 1, 2011
Does that mean $75,000 or $7,500?
posted by mlis at 6:29 PM on June 1, 2011
Those amounts--7,500 & 75,000--sound like angel investors not VCs. VCs typically raise millions for their investments.
posted by dfriedman at 6:42 PM on June 1, 2011
posted by dfriedman at 6:42 PM on June 1, 2011
Yes, I know. The OP also said:
a small private investment (which is all I am in a position to offer)
posted by mlis at 6:57 PM on June 1, 2011
a small private investment (which is all I am in a position to offer)
posted by mlis at 6:57 PM on June 1, 2011
If the OP wants to give somewhere between 5,000 usd - 300,000 usd, the OP will be either a 'friends and family' investor or an angel investor. If the company does a round of fundraising with a VC then they will probably offer equity to friends and family. If the company does not, the difficulty really lies in the valuation - what is the company worth? Assessing the value would easily eat up the investment capital. Best to offer the investment as a convertible loan which converts when additional investors go in or after a certain time... Also more secure for the OP.
posted by zia at 3:26 AM on June 2, 2011
posted by zia at 3:26 AM on June 2, 2011
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posted by mleigh at 5:26 PM on June 1, 2011