Hi all
I have a complicated situation in regards to our new U.S. based LLC company. My wife and I are going to ship items manufactured in the U.S. to Europe, where we are originally from. We have invested $16k in the business from credit card loans with 0 % interest for 12 months, and the business will be up and running during this month. So far, so good.
The problem is that we have only some months of savings left to cover our living expenses. From March, we have to resort to credit cards with 22 % APR ,which would amount to about $3,000 a month in high interest debt. I expect the business to cover this monthly amount in 6 to 9 months (June - September).
Another thing is that we are both full-time students that are taking care of our 1 year old son. I devote most of my free time to running the business (about 35 hours a week), while my wife helps where she can, but is mostly taking care of the baby. This is my first real business and I have no mentor and limited amount of business people in my circle, something that I am trying to change by networking, reading business books etc.
One of my good childhood friends really liked the business idea that I told him about, and he now wants to invest about $4500 in the business. This would give him around 9 - 10 % equity in a model based on dollar investment and how many hours of work put down in the business.
He has an MBA in business and finance and is a very smart and responsible person with a lot of contacts. I see him as an asset since he is good with numbers and accounting, comes up with good ideas and is able to guide me where I am stuck. I am more of a creative entrepreneur, while he has more work experience and a MBA degree from a well-respected business school.
I would welcome him as a partner mostly for these two reasons: His capital investment would free up some of the money that we originally have set aside for the business to instead pay for two months of living expenses. This would certainly decrease some of the immense pressure I have on me to make this work. The other reason is even more important. I see him as an important asset to the business. His knowledge and experience in business can help grow our business, although he has not had any ventures before.
My wife is against this move:
Wife’s Notes:
Thanks in advance
I have a complicated situation in regards to our new U.S. based LLC company. My wife and I are going to ship items manufactured in the U.S. to Europe, where we are originally from. We have invested $16k in the business from credit card loans with 0 % interest for 12 months, and the business will be up and running during this month. So far, so good.
The problem is that we have only some months of savings left to cover our living expenses. From March, we have to resort to credit cards with 22 % APR ,which would amount to about $3,000 a month in high interest debt. I expect the business to cover this monthly amount in 6 to 9 months (June - September).
Another thing is that we are both full-time students that are taking care of our 1 year old son. I devote most of my free time to running the business (about 35 hours a week), while my wife helps where she can, but is mostly taking care of the baby. This is my first real business and I have no mentor and limited amount of business people in my circle, something that I am trying to change by networking, reading business books etc.
One of my good childhood friends really liked the business idea that I told him about, and he now wants to invest about $4500 in the business. This would give him around 9 - 10 % equity in a model based on dollar investment and how many hours of work put down in the business.
He has an MBA in business and finance and is a very smart and responsible person with a lot of contacts. I see him as an asset since he is good with numbers and accounting, comes up with good ideas and is able to guide me where I am stuck. I am more of a creative entrepreneur, while he has more work experience and a MBA degree from a well-respected business school.
I would welcome him as a partner mostly for these two reasons: His capital investment would free up some of the money that we originally have set aside for the business to instead pay for two months of living expenses. This would certainly decrease some of the immense pressure I have on me to make this work. The other reason is even more important. I see him as an important asset to the business. His knowledge and experience in business can help grow our business, although he has not had any ventures before.
My wife is against this move:
Wife’s Notes:
- The credit we have used thus far is MY personal, not business credit. All $20K is under my name. I could potentially secure an additional $5K which would cover two months of living expenses. All this credit is Interest-free until August 2015.
- Business is also under my name only, LLC. Investor is not a U.S. citizen, he does not have a social security number. I do not want him involved in the company for future ventures, so I would need to create a new business for a new project. This would incur extra time and expenses.
- We are one month away from launching. We have enough savings until March. I believe we can make bills until then. After that, we could take projects on the side if needed.
- If we took investor’s money, it would be to cover our personal living expenses.
- We have enough inventory, office furniture, a working website design with mobile web design.
- I do not know the partner that well, but I trust that he is honest. My husband, the partner and me have all business degrees. I think this is redundant. I also have a graphic design degree. The partner has a stable job, which would make this business a hobby for him. Our family depends on this business, we have more at stake.
- I am concerned about seeing the money I invested back BEFORE the other investor gets paid. The profit would go to pay back the 20K in loans taken for the business and reinvesting to grow inventory, I believe having a business partner would hold us back.
- The business partner’s investment would top at $4K, so there is no additional money he could put in if needed. Additional funding would still depend on my credit. My husband said he would not let him in for that cheap if we had sales… we are only one month away from launching.
- My personal opinion is that my husband needs someone to bounce ideas and share. I am open to including an investor, I just don't think he is the right fit for the job because of his limited funding, his lack of commitment if things go bad, and the fact that we are so close to launching at this point.
Thanks in advance
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