Investor money found
- Thread starter Beef11
- Start date
Help Support CattleToday:
Susie David
Well-known member
A real good way to loose a friend....or sell off your business to him. Investors don't front money without wanting some tangable asset in return and usually expect that they have a steak in the operation in return.
If he is willing to invest the $$$ without creating liability on your part then go ahead but create a solid agreement that covers your butt....well worth the lawyer's fee.
The most important part of the business plan is the section that outlines the dissolution of the business...not important until needed then a binding document if properly administered.
And that's just my two bits worth...asked for or not...Dmc
If he is willing to invest the $$$ without creating liability on your part then go ahead but create a solid agreement that covers your butt....well worth the lawyer's fee.
The most important part of the business plan is the section that outlines the dissolution of the business...not important until needed then a binding document if properly administered.
And that's just my two bits worth...asked for or not...Dmc
Beef11":4pwxxgu9 said:
I have read many times,,, and believe it to be true with my own experiences.
Never use investors who are not worth atleast 1 Million in net worth.
If he is a business man, as are you, make a good, realestic estimate of possible profit out come and the risk then go with it. It is just like any other investment deal. People who do that stuff know the routine. ;-)
Beef11":2epklur5 said:
I kinda have to agree. Nothing against regular folks; but you really don't want to be heavily partnered with somebody who will need to sell out if they miss two weeks of work, their wife wants to remodel the kitchen, their kid needs braces, they have a sudden urge to buy a bassboat, or they crash their pickup truck.
Yall are exactly right.
People investing their whole 401K and childrens college funds do not usually make good business partners.
People who have that net worth tend to look at things a little differently partley out of experience with other investments. They don't scare as easily with minor fluctuations. They are in it for the haul if they couldn't afford to lose what they invested they wouldn't have done it,,, along with a whole lot of other things.
There can even be a difference in people who have made their money buy building up businesses and good investing as compared to people who inherited or made their money from oil wells or some thing.
Don't mean to stereotype people put as a general rule this holds to be true. ;-)
People investing their whole 401K and childrens college funds do not usually make good business partners.
People who have that net worth tend to look at things a little differently partley out of experience with other investments. They don't scare as easily with minor fluctuations. They are in it for the haul if they couldn't afford to lose what they invested they wouldn't have done it,,, along with a whole lot of other things.
There can even be a difference in people who have made their money buy building up businesses and good investing as compared to people who inherited or made their money from oil wells or some thing.
Don't mean to stereotype people put as a general rule this holds to be true. ;-)
Running Arrow Bill
Well-known member
IMO an "Investor" is an opportunist hoping to turn a profit on his/her investment. Investing in livestock is in no way a sure road to any type of profit. If an investor doesn't receive a "profit" or "dividend check" every year, then he/she becomes an emotional and financial liability on YOUR end.
A family or friend investor is even a worse option...
If the investor doesn't see a $$ return on the investment, then he/she may want to cash out his/her $$ input; and/or want to start telling you how to run your business.
IMO it is an accident waiting to happen...
A family or friend investor is even a worse option...
If the investor doesn't see a $$ return on the investment, then he/she may want to cash out his/her $$ input; and/or want to start telling you how to run your business.
IMO it is an accident waiting to happen...
farmerdude
Member
President Jimmy Carter once told a story about his partnership with a fellow to get into the cattle business. It worked out that the nice healthy cattle ended up belonging to the partner, and the sick and dead ones ended up being the President's.
They did not have a written agreement.
Get it in writing, and both of you sit down with a lawyer.
They did not have a written agreement.
Get it in writing, and both of you sit down with a lawyer.
One other thing I might add is,
People should NOT get into the cattle business soley to make money.
Every one here knows there are a list of alot easier and more productive ways to make money.
First and foremost the investor has to want to be in the cattle business for personal reasons. The opportunity to actually profit money a couple years down the road has to be iceing on the cake.
They should have a well diversified invesment portfolio already established and this is just another investment to add basically because they can.
People investing in cattle expecting it to be their retirement money down the road is another NO-NO when looking at possible investors.
People should NOT get into the cattle business soley to make money.
Every one here knows there are a list of alot easier and more productive ways to make money.
First and foremost the investor has to want to be in the cattle business for personal reasons. The opportunity to actually profit money a couple years down the road has to be iceing on the cake.
They should have a well diversified invesment portfolio already established and this is just another investment to add basically because they can.
People investing in cattle expecting it to be their retirement money down the road is another NO-NO when looking at possible investors.
sanchez
Well-known member
Exactly. Bottom line is, in my mind at least, don't do it.
It sounds like the guy is looking to play his money, which means he probably doesn't really have an abundance. What's going to happen if things go south and you have to dig yourself out with more money? What's your exit strategy if it gets to that point? What amount of return is expected?
In my occupation I've met an abundance of people with money and I've yet to meet one that had money out of sheer luck (there are the exceptions sure), no person with any decent monetary capacity is stupid enough to throw money out at a venture like this with small margins, fairly risky returns, or if they are, they're not going to have much money very long - and entering into a relationship like this should be avoided either way.
It sounds like the guy is looking to play his money, which means he probably doesn't really have an abundance. What's going to happen if things go south and you have to dig yourself out with more money? What's your exit strategy if it gets to that point? What amount of return is expected?
In my occupation I've met an abundance of people with money and I've yet to meet one that had money out of sheer luck (there are the exceptions sure), no person with any decent monetary capacity is stupid enough to throw money out at a venture like this with small margins, fairly risky returns, or if they are, they're not going to have much money very long - and entering into a relationship like this should be avoided either way.
Brute 23":2bbok1on said:
CattleHand
Well-known member
I agree with what has been said, dont take money from a friend. A couple things come to my mind:
1. What does your friend know about cattle?
~If it isnt much he may find out its not as easy of a "gold mine" as he may have thought"
2.What happens if everything goes wrong?
~It's great to think of everything good that can happen and how it can work best for both of you but if it goes sour what then?
1. What does your friend know about cattle?
~If it isnt much he may find out its not as easy of a "gold mine" as he may have thought"
2.What happens if everything goes wrong?
~It's great to think of everything good that can happen and how it can work best for both of you but if it goes sour what then?
Running Arrow Bill":l0bwr2ua said:
BUT don't you know this going in???? An investor is like borrowing money from a bank. He is going to have to get HIS or there is going to be problems. Whether that is a fat CHECK every six months or a growing herd (growing equity) or (preferably) both you need to be able to show an investor that you actually DID something with his money. I think there would be more investors out there in this industry if this industry were more invester friendly.
Why the negative advice? Didn't you all hear this friend goes to church?
Beef11, I grew up in your region, and I'm guessing I'm a member of your church, and I must say, it ain't no guarantee of honesty and virtue.
But, sounds like you're going to do what you're going to do. Few people change their direction based on advice given. Have to learn from experience.
Beef11, I grew up in your region, and I'm guessing I'm a member of your church, and I must say, it ain't no guarantee of honesty and virtue.
But, sounds like you're going to do what you're going to do. Few people change their direction based on advice given. Have to learn from experience.
C HOLLAND
Well-known member
Jogeephus":51zdjzxs said:
Spoken by a well trained Hubby, and don't forget to pick up your dirty clothes.
I think that may be describing me too.
:lol: :lol:
Beef11
Well-known member
I haven't decided one way or the other. I really prefer to be as independent as possible then on the other hand the chance to slingshot your operation is tempting. It would take some real clear and favorable terms to get me into the deal.
As for church goers it is far from a qualifying attribute. I'm in the process of getting the shaft from the owner of a building i rent. A member of our? Church. He feels kind of bad about costing me lots of money... not slowing him down much. I try not to let bad experiences with members sway my decisions one way or another and you are absolutely correct about not being a guarantee of honesty and virtue.
dcara
Well-known member
I think you have to have a good contract if you want to minimize problems between the partners/investors. It would also help if you understood what exactly your friend is expecting from this business relationship since contracts often do not cover every contingency. Any business deal problems I've ever had could be summed up as different expectations from a set of circumstances not previously defined and/or anticipated.
Maybe start out with a short term contract to test the waters and flesh out a preliminary framework for the business relationship.
Maybe start out with a short term contract to test the waters and flesh out a preliminary framework for the business relationship.
arkcowman
Well-known member
The best way to make a small fortune in the cattle business is to start with a large one.
