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 Need advice for my future investor

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TSriou666
post Feb 11 2016, 01:11 PM, updated 9y ago

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Hi, I currently looking for an investor for my current business. My question is, I read somewhere in the internet that I need a written agreement for my investor.

As a safety measure for both party I need to make promissory note or corporate bond? I thought promissory note maybe enough as my company only a small one and I only looking for 30-50k investment. But this is the first time I'm looking for investor so I don't know about the actual rule, can someone here care to explain?

I still quite new in this, please advice me.
SUSazhan82
post Feb 11 2016, 02:05 PM

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QUOTE(riou666 @ Feb 11 2016, 01:11 PM)
Hi, I currently looking for an investor for my current business. My question is, I read somewhere in the internet that I need a written agreement for my investor.

As a safety measure for both party I need to make promissory note or corporate bond? I thought promissory note maybe enough as my company only a small one and I only looking for 30-50k investment. But this is the first time I'm looking for investor so I don't know about the actual rule, can someone here care to explain?

I still quite new in this, please advice me.
*
A promissory note is quite common if the investor does not participate in the business, ie non-shareholder, non-management investor.
First time for me hearing someone asking for a corporate bond for small investment.
I don't believe there is any rule with regards to investment. It depends on how you and him/her negotiate the terms of investment.
Normally lawyers just create a shareholder's agreement between partners/investors. Term sheets are also common, especially for tech companies.
TSriou666
post Feb 11 2016, 02:34 PM

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QUOTE(azhan82 @ Feb 11 2016, 02:05 PM)
A promissory note is quite common if the investor does not participate in the business, ie non-shareholder, non-management investor.
First time for me hearing someone asking for a corporate bond for small investment.
I don't believe there is any rule with regards to investment. It depends on how you and him/her negotiate the terms of investment.
Normally lawyers just create a shareholder's agreement between partners/investors. Term sheets are also common, especially for tech companies.
*
Thank you for fast reply and thank you for clearing that up. thumbup.gif
SUSazhan82
post Feb 11 2016, 02:55 PM

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QUOTE(riou666 @ Feb 11 2016, 02:34 PM)
Thank you for fast reply and thank you for clearing that up.  thumbup.gif
*
Your welcome.. biggrin.gif
so, I'm guessing all your business plan, tenancy agreements are ready by now?
just waiting for investor to put the money in?
TSriou666
post Feb 11 2016, 03:14 PM

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QUOTE(azhan82 @ Feb 11 2016, 02:55 PM)
Your welcome..  biggrin.gif
so, I'm guessing all your business plan, tenancy agreements are ready by now?
just waiting for investor to put the money in?
*
Yeah biggrin.gif

I have been doing this for five years now, I just need some extra money to expand it.
knwong
post Feb 11 2016, 05:26 PM

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What business? 30-50k is actually a small amount to many investor.
TSriou666
post Feb 11 2016, 07:06 PM

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Logistic/movers company, I want to buy one more lorry as the demand increase.
SUSazhan82
post Feb 11 2016, 07:18 PM

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QUOTE(riou666 @ Feb 11 2016, 03:14 PM)
Yeah  biggrin.gif

I have been doing this for five  years now, I just need some extra money to expand it.
*
QUOTE(riou666 @ Feb 11 2016, 07:06 PM)
Logistic/movers company, I want to buy one more lorry as the demand increase.
*
Well, if your a company that have been in business for more than 3 years, its quite easy to get a loan..
especially for asset purchase..
better use that RM 30k-50k for working capital instead of buying lorry.
of course, this is a suggestion biggrin.gif
TSriou666
post Feb 11 2016, 07:44 PM

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QUOTE(azhan82 @ Feb 11 2016, 07:18 PM)
Well, if your a company that have been in business for more than 3 years, its quite easy to get a loan..
especially for asset purchase..
better use that RM 30k-50k for working capital instead of buying lorry.
of course, this is a suggestion  biggrin.gif
*
I know, I even had that kind of money in my bank. I just want to try 'other people money' concept tongue.gif .

I'm thinking giving my investor 10% of their investment money for annual interest but the investment money can only be retrieved after five years.

I don't know if he will accept this kind of proposal as I still didn't present it to him (my future investor). If you guys don't mind can I have some opinion in this? Is this possible?
SUSazhan82
post Feb 11 2016, 07:54 PM

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QUOTE(riou666 @ Feb 11 2016, 07:44 PM)
I know, I even had that kind of money in my bank. I just want to try 'other people money' concept  tongue.gif .

I'm thinking giving my investor 10% of their investment money for annual interest but the investment money can only be retrieved after five years.

I don't know if he will accept this kind of proposal as I still didn't present it to him (my future investor). If you guys don't mind can I have some opinion in this? Is this possible?
*
Well, if your a company, you can do a Preference Share concept. He invest, and pay 10% divident yearly...
No shareholding, no management involvement. IF he wants out, company buys back those shares at agreed value.
Non-company, just create a shareholders/Investor agreement and specify the terms in it.
maraippo
post Feb 11 2016, 07:58 PM

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for funder not necessarily give shares right? just need agreement agreed by both.

i also thinking like ts to get fund and offer dividend to funder. or is there better way for it to be done?


TSriou666
post Feb 11 2016, 08:10 PM

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QUOTE(azhan82 @ Feb 11 2016, 07:54 PM)
Well, if your a company, you can do a Preference Share concept. He invest, and pay 10% divident yearly...
No shareholding, no management involvement. IF he wants out, company buys back those shares at agreed value.
Non-company, just create a shareholders/Investor agreement and specify the terms in it.
*
My company only registered as enterprise. To use this concept I need to upgrade my company right?
SUSazhan82
post Feb 11 2016, 08:19 PM

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QUOTE(maraippo @ Feb 11 2016, 07:58 PM)
for funder not necessarily give shares right? just need agreement agreed by both.

i also thinking like ts to get fund and offer dividend to funder. or is there better way for it to be done?
*
QUOTE(riou666 @ Feb 11 2016, 08:10 PM)
My company only registered as enterprise. To use this concept I need to upgrade my company right?
*
No other way then..
Investor/shareholders agreement. Or promissory note..
TSriou666
post Feb 11 2016, 08:48 PM

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QUOTE(azhan82 @ Feb 11 2016, 08:19 PM)
No other way then..
Investor/shareholders agreement. Or promissory note..
*
Yeah, I thought so biggrin.gif

Beside, I'm quite illiterate about big company rule. Now is my first step to explore the other way to raise fund beside off bank loan. If this is a success I want to try my hand on freight service or stock market lol
maraippo
post Feb 11 2016, 11:53 PM

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QUOTE(riou666 @ Feb 11 2016, 08:48 PM)
Yeah, I thought so biggrin.gif

Beside, I'm quite illiterate about big company rule. Now is my first step to explore the other way to raise fund beside off bank loan. If this is a success I want to try my hand on freight service or stock market lol
*
I once had a session with logistics business owner handling import export. She advise me if i was going to jump into this business, can start with freight. Im not sure though cos have zero exp in this. Now she owns a fleet of lorry, etc. Wish u all the best ts thumbup.gif

 

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