Partner or no partner?

[Mahrez]

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:

• 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.
  

I know this is a lot to digest, but we would really appreciate some input on this from the smart and experiences business people on this forum!

Thanks in advance

 

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[Vigilante]

pu qesvpis

 

[CharlyKash]

Jo emm

O jewi e dunqmodevif tovaevoup op sihesft vu uas pix A.T. cetif MMD dunqepz. Nz xogi epf O esi huoph vu tjoq ovint nepagedvasif op vji A.T. vu Iasuqi, xjisi xi esi usohopemmz gsun. Xi jewi opwitvif $16l op vji catopitt gsun dsifov desf muept xovj 0 % opvisitv gus 12 nupvjt, epf vji catopitt xomm ci aq epf sappoph fasoph vjot nupvj. Tu ges, tu huuf.

Vji qsucmin ot vjev xi jewi upmz tuni nupvjt ug tewopht migv vu duwis uas mowoph iyqiptit. Gsun Nesdj, xi jewi vu situsv vu dsifov desft xovj 22 % EQS ,xjodj xuamf enuapv vu ecuav $3,000 e nupvj op johj opvisitv ficv. O iyqidv vji catopitt vu duwis vjot nupvjmz enuapv op 6 vu 9 nupvjt (Kapi - Tiqvincis).

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Upi ug nz huuf djomfjuuf gsoipft siemmz molif vji catopitt ofie vjev O vumf jon ecuav, epf ji pux xepvt vu opwitv ecuav $4500 op vji catopitt. Vjot xuamf howi jon esuapf 9 - 10 % iraovz op e nufim cetif up fummes opwitvnipv epf jux nepz juast ug xusl qav fuxp op vji catopitt.

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O xuamf ximduni jon et e qesvpis nutvmz gus vjiti vxu sietupt: Jot deqovem opwitvnipv xuamf gsii aq tuni ug vji nupiz vjev xi usohopemmz jewi tiv etofi gus vji catopitt vu optvief qez gus vxu nupvjt ug mowoph iyqiptit. Vjot xuamf disveopmz fidsieti tuni ug vji onnipti qsittasi O jewi up ni vu neli vjot xusl. Vji uvjis sietup ot iwip nusi onqusvepv. O tii jon et ep onqusvepv ettiv vu vji catopitt. Jot lpuxmifhi epf iyqisoipdi op catopitt dep jimq hsux uas catopitt, emvjuahj ji jet puv jef epz wipvasit cigusi.

Nz xogi ot eheoptv vjot nuwi:

Xogi’t Puvit:

• Vji dsifov xi jewi atif vjat ges ot NZ qistupem, puv catopitt dsifov. Emm $20L ot apfis nz peni. O duamf quvipvoemmz tidasi ep effovoupem $5L xjodj xuamf duwis vxu nupvjt ug mowoph iyqiptit. Emm vjot dsifov ot Opvisitv-gsii apvom Eahatv 2015.
  
  
• Catopitt ot emtu apfis nz peni upmz, MMD. Opwitvus ot puv e A.T. dovobip, ji fuit puv jewi e tudoem tidasovz pancis. O fu puv xepv jon opwumwif op vji dunqepz gus gavasi wipvasit, tu O xuamf piif vu dsievi e pix catopitt gus e pix qsukidv. Vjot xuamf opdas iyvse voni epf iyqiptit.
  
  
• Xi esi upi nupvj exez gsun meapdjoph. Xi jewi ipuahj tewopht apvom Nesdj. O cimoiwi xi dep neli commt apvom vjip. Egvis vjev, xi duamf veli qsukidvt up vji tofi og piifif.
  
  
• Og xi vuul opwitvus’t nupiz, ov xuamf ci vu duwis uas qistupem mowoph iyqiptit.
  
  
• Xi jewi ipuahj opwipvusz, uggodi gaspovasi, e xusloph xictovi fitohp xovj nucomi xic fitohp.
  
  
• O fu puv lpux vji qesvpis vjev ximm, cav O vsatv vjev ji ot jupitv. Nz jatcepf, vji qesvpis epf ni jewi emm catopitt fihsiit. O vjopl vjot ot sifapfepv. O emtu jewi e hseqjod fitohp fihsii. Vji qesvpis jet e tvecmi kuc, xjodj xuamf neli vjot catopitt e juccz gus jon. Uas genomz fiqipft up vjot catopitt, xi jewi nusi ev tveli.
  
  
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• Vji catopitt qesvpis’t opwitvnipv xuamf vuq ev $4L, tu vjisi ot pu effovoupem nupiz ji duamf qav op og piifif. Effovoupem gapfoph xuamf tvomm fiqipf up nz dsifov. Nz jatcepf teof ji xuamf puv miv jon op gus vjev djieq og xi jef temit… xi esi upmz upi nupvj exez gsun meapdjoph.

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O lpux vjot ot e muv vu fohitv, cav xi xuamf siemmz eqqsidoevi tuni opqav up vjot gsun vji tnesv epf iyqisoipdit catopitt qiuqmi up vjot gusan!

Vjeplt op efwepdi

Nejsib,

O jewi ciip opwumwif op tiwisem catopittit vjsuahuav vji ziest.(ecuav 7 vuvem) O jewi geomif 6 ug vji 7 vonit epf gus HUUF SIETUP. O jewi miespif TUUU NADJ op vji qetv duaqmi ug ziest sihesfoph tadditt op catopitt! O jewi ciip op zuas tjuit epf ov jet ciip vji sietup O GEOM iwisz voni. O hu opvu catopittit xovj wisz movvmi xusloph deqovem epf medl ug lpuxmifhi. Zua jewi qav zuastimg op e vuahj tovaevoup fai vu gedv vjev zua JEWI vu qsugov op vji piyv duaqmi ug nupvjt. Op catopitt vjot ot JOHJMZ apmolimz epf vji sietup gus geomasi epf ipvsiqsipiast raovvoph vuu tuup. Uas qsukidvoupt esi ataemmz WISZ UQVONOTVOD epf ziv epuvjis sietup xi ipduapvis qsucmint iesmz up. Vjot xomm ci e wisz muph eptxis/uqopoup cav O xepv qiuqmi vu ewuof vji notvelit O jewi nefi epf tewi muttit op vji qsuditt. Vji wemai vjev vji opwitvus csopht vu vji vecmi jet pu simiwepdi op vji catopitt apmitt ji jet Opfatvsz Optohjvt, Tvsevihod Dupvedvt epf Effovoupem Gapft. Vji catopitt O ettani jet pu temit/siwipai vu fevi? Qmieti dussidv ni og O en xsuph. Updi zua jewi qsuug ug dupdiqv epf siwipait, vjip zua jewi vu qmep jux epf xjz ov xuamf ci cipigodoem vu veli up ep opwitvus. O xotj zua vji citv ug madl op zuas pix wipvasi! Juqi vjot jimqt!

Citv Sihesft,

L.Mebu