Creating an advantagegous agreement to obtain seed money, legal loopholes?

[mr shrewd]

What is the name of your state (only U.S. law)? maryland

Hello: I have 2 questions

I am at the brainstorming phase of putting together a start up business(s). At the moment I don't have any money or resources, but, I was wondering if I got investors to pony up money and was unable to pay it back is their a way to word the contract so that I wont be legally liable. Also, I wanted to know if the business succeeds is their a way to pay out their initial investment(with interest as if it was a loan) and dissolve the relationship so I can run the company without investors or partners. I would pay it back immediately.

I really need legal help here so, please your best answers and not fatherly advice. Thanks

P.S. No I don't have family and friends to get money from.

 

[seniorjudge]

Q: I was wondering if I got investors to pony up money and was unable to pay it back is their a way to word the contract so that I wont be legally liable.

A: Yes. See a lawyer for details. Of course, if you have such a contract, don't expect many investors.

 

[mr shrewd]

Thanks...

I don't think any investment is guaranteed. People invest in the stock market don't always make money. It will be no different with me. I think I need to find a lawyer who is clever in their wording. Any one want to work with me

 

[Some Random Guy]

No. Go away and find a new set of parents who will instill some moral values in you.

 

[mr shrewd]

No. Go away and find a new set of parents who will instill some moral values in you.

Don't get mad at me because the law has loopholes. Take that up with congress.

 

[SilkKnitter]

What would you be doing? just curious.

 

[mmmagique]

OP,

What would the investors have to gain in such a situation?

If your idea doesn't work, they lose money, if it does work, they get a small compensation and you become (possibly) wealthy?

It does not sound like a win/win situation to me.

If you really want investors (especially these days) you have to be willing to give more than that. (imo)

 

[Antigone*]

I am with SRG ~ this OP needs to go his merry way.

Anyone who is not willing to front their own money in a business venture is a scam artist or stupid. People investing their money with someone like this are completely foolish.

 

[cfspartan]

Not too difficult

Just have an exculpatory clause built into the contract. It's standard for investors not to have their principal guaranteed. Remember, if you purchase stock in a publicly traded company, you are last to be repaid in the event of default. A lack of a personal guarantee may make your offering less enticing, but there are people who will invest if your business plan is strong enough. Just remember that without "skin in the game" and not being on the hook for the debt, you are opening yourself up to investors who will require a seat on the board or a similar position of management to ensure they are looking after their investment. Also, expect a hefty repayment schedule - where 80% or more of profits go towards retiring their capital position and then a hefty interest in the company after break even.

 

[mr shrewd]

I am with SRG ~ this OP needs to go his merry way.

Anyone who is not willing to front their own money in a business venture is a scam artist or stupid. People investing their money with someone like this are completely foolish.

Love the reply...since you know everything about me and what I am trying to do. Why don't I just promise the sky and don't deliver, now thats a scam! Please don't respond with your negative BS, skip my post and be on your merry way!!!!!!!!

 

[mr shrewd]

Just have an exculpatory clause built into the contract. It's standard for investors not to have their principal guaranteed. Remember, if you purchase stock in a publicly traded company, you are last to be repaid in the event of default. A lack of a personal guarantee may make your offering less enticing, but there are people who will invest if your business plan is strong enough. Just remember that without "skin in the game" and not being on the hook for the debt, you are opening yourself up to investors who will require a seat on the board or a similar position of management to ensure they are looking after their investment. Also, expect a hefty repayment schedule - where 80% or more of profits go towards retiring their capital position and then a hefty interest in the company after break even.

Thanks for your reply. I was trying to avoid having people come on as partners for the long term. I am hoping to run it all by myself without giving greedy investors a chunk of ongoing profits. We'll see....

Thanks again

 

[garrula lingua]

'Legal loopholes' do not physically protect you from irate people.

I have known many people one would NOT want to mess with (these may include little old ladies who carry guns).

'Legalities' may be the minor consequences of crossing those people.

I sense a whooping coming at you, child.

Not everyone fights in court; many still use self-help methods.

 

[mr shrewd]

E

'Legal loopholes' do not physically protect you from irate people.

I have known many people one would NOT want to mess with (these may include little old ladies who carry guns).

'Legalities' may be the minor consequences of crossing those people.

I sense a whooping coming at you, child.

Not everyone fights in court; many still use self-help methods.

I see the world has gone mad. This doesn't not help me at all. You'd be surprised who is behind a screen typing. I see my instincts was right about people. Pretend I am in the world alone************** One man is an island!!!!!!

CASE CLOSED!!!! Please no more replys!