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Investing: What type of structure should I invest in a small business as to best protect myself?
NJ
NJ
Nicholas Jones, Design Thinking | Consultant answered:

It sounds like you may have a little fear in regards to the use of your money and or the return of your money. If this is the case, I would merely structure a non-rigid milestone based payout. So, If you are willing to invest $100k for example, I would look at what that $100k needs to be used for and when. As in any business, you may need to give a little more a little earlier to bridge cash flow issues. But trust yourself and look at the facts of the circumstance regarding releasing money early. As for when to take it out, we make investments to make more money, but the business always comes first. From the sounds of it, you are funding to create something, or proof of concept so to say. I wouldn't be too eager to pull money right now, but none the less, I would look at what it would mean for the business regarding cash flow for how you can take back your money. Again, always remember contracts can be flexible so you can always add stipulations for if you do particularly well at specific events, you get little extra money, versus if you do just ok at one you get little or no money. If you want to chat more about this, please reach out to me.

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