What type of structure should I invest in a small business as to best protect myself?

Hi there, this question is a loaded one... Not the typical investing type question found here on Clarity - but... Since I do invest heavily, I will try to give you my two cents on the subject. I'm not a licensed advisor and this is purely conversational and by means a professional recommendation. things to know: 1. penny stocks are typically not a good idea. 2. penny stocks can be stocks sold each to even $2-3 each... not necessarily pennies. 3. also if you want to make money, don't go for the get rich quick schemes, that never pans out.... 4. Good companies aren't valued by their ticker price but their value as a company and that is calculated using their market cap, their debt, & outstanding number of shares. Compared to what the EPS vs price is how you should help determine if a stock is worth buying for potential flipping. 5. that takes me to this; flipping game and holding is a completely different strategy. 6. when flipping, if a stock drops you may not want to buy more (depending on the historical legitimacy of the company) you may want to buy more at dropped prices to margin out the losses and be able to sell quicker than just letting the negative 'losses' rise up to where you bought them initially and then sell. Sometimes buying low when you're on negative is a good thing - but only with certain companies. 7. if you chose the right companies, #6, will always be a buy option if low.. because it means your good company is 'on sale' - only thing that is affected is how soon you'd be able to sell. 8. Stop asking for penny stock companies, because you will never get the best choice that way. also is not a good long term strategy to gamble your money based on what strangers tell you to buy and spend your own hard earned money on. If it goes sour, is that person going to pay you back? Not even professional financial advisors guarantee - so don't ask strangers for actual companies. Ask for specific knowledge instead. 9. Stick to companies for industries you actually, honestly understand. If you buy a lot of them, or see your GF buying a lot of that and don't see the demand waining down... 10. Consider this: Because your buying decision should always be based on value, not price. the ticker price is irrelevant. Theoretically speaking, is the same whether you have $1000 and buy a thousand $1 shares or buy 3 @ $330 each share. what is important is their stability and their potential profit margin based on value vs ticker price not how many shares you own. Historically speaking, the less the ticker price is the more dangerous it is. Don't look at penny stocks because you only have a bit of money, look at industries first, then companies, then value. Don't start your search based on ticker price first. That's a sure fire way to have some expensive lessons. I'm not a financial advisor, but have about 10 years investing, MBA and have a few groups where I contribute my stock info as well. If you ever need any marketing or real estate help don't hesitate to message me. Otherwise, I hope I was a bit helpful :)

It's a tricky situation. In my experience, it makes the CEO of the company not strong enough if he can't handle the fundraising efforts. It might be different in biotech, especially because the R&D and the work that has to be done is way more time consuming than a regular startup. Also, investors like people who are also investing (in equal conditions) in the startup, because that reflects that they put their money where their mouths are. You should help the CEO to make a fundraising strategy, build it up for them and let him put his face on it. If you're working as a consultant, you can charge by commission.

This is a question that requires far more than a simple 10-minute answer, as due diligence is an extremely complex subject and only having a few "quick tips" would put you in a very vulnerable position. Generally speaking though, the key areas that you would want to focus on (depending on the type of the web business that you're about to buy) are: * Financial verification - make sure to verify all income and expenditure, and never rely on screenshots or video proofs, as these are easily faked. Always require either live access to accounts/books or schedule a real-time screen sharing session with the seller. * Make sure to fully understand the business model and its sustainability. This is easier said than done but it's perhaps the most important aspect of DD. You need to be able to make sure that the business is an actual, viable and sustainable business, rather than a fly-by-night website. I've written about this in length here: http://bryanoneil.com/the-most-important-website-due-diligence-question-that-buyers-rarely-ask/ * Take a very thorough look through the site's analytics (preferably you should request live access to its Google Analytics account) and make sure everything is in order. Also take a thorough look through the site's traffic sources and ensure that they're sustainable. * Validate the claimed owner responsibilities so that you wouldn't end up buying a business that's actually a full time job. Sellers often misrepresent this part so it's important to perform a sanity check and ensure that the claimed hours match the reality. But as I said, there's far more to due diligence than that. I've published a fair number of articles about this in my blog (http://bryanoneil.com) that you would probably find useful, but I would still recommend you to either do a lot of reading up on the subject, or to speak to a professional. As for trustworthy brokers - I'm obviously a bit biased here as I run a brokerage myself (Deal Flow - http://dealflow.flippa.com/), but apart from us the other two larger brokers are Quiet Light Brokerage and FE International. I'd recommend you to steer clear from brokers who either have too many listings (as that's an indication of sub-par vetting standards and therefore low quality listings), or brokers that haven't established themselves in the industry, as those newer brokers are rarely experienced enough to be able to properly validate the businesses that they list, and are often desperate to complete deals, leading them to intentional misrepresentation. Hope this helps! Bryan