Investing in an existing business

grey_gym_sock

talexuser wrote: »

Rule no 1 - never invest in something you don't understand.

Freecall wrote: »

Rule no 2 - never invest in something you don't understand.

Rule no 4 - never forget rule no 3.

rking100uk

TheTracker wrote: »

You should see an accountant and/or solicitor.

Learn what the offer really is and constraints and risks on the equity. An accountant may help with understanding the tax implications and best way for you to structure the ownership. I tend to just use my accountant and he organises solicitor views.

It's quite common for start ups to work in this way - equity/salary split. I don't think your problem is "you don't understanding what you're investing in", quite the reverse, it's you don't understand how to contractualise what it is you're investing in.

You've hit the nail on the head with your last statement. I'm happy with what I'm investing in, prepared to lose it all and happy with the people I'm investing in. I'm aware that it the business folds then yes I'll lose my job as well but have a plan in place should this happen

rking100uk

Thanks for all your advice. I'll book in with an accountant for the tax side of things and see if he / she can point me in the right direction of a good commercial solicitor