I’m planning on asking my grandfather to invest in my new business venture. Any advice?
Posted by admin on 11 Mar 2010 9:24 am. Filed under Small Business.
natethenorsk
I’m starting a home-based life and health insurance brokerage and I’ll also offer wealth management services. My overhead will be low, but I want to invest some start-up capital in additional training for myself, as well as marketing my business. The main concern I have is that my grandpa invested $20k in my dad’s failed business over 20 years ago, and it’s made holiday gatherings very awkward. I plan on paying back the capital I need to start ($6500), but it may take 3 years or more if the business starts more slowly than I anticipate. 1) How should I go about requesting start-up funding?; and 2) If it’s granted, how should I set up the repayment arrangement? As a loan, or should I give the investor a stake in the company? What are the legal ramifications of the latter since he is not licensed to sell life and health insurance (is it considered sharing commission if he receives income from the business)?
I’m starting a home-based life and health insurance brokerage and I’ll also offer wealth management services. My overhead will be low, but I want to invest some start-up capital in additional training for myself, as well as marketing my business. The main concern I have is that my grandpa invested $20k in my dad’s failed business over 20 years ago, and it’s made holiday gatherings very awkward. I plan on paying back the capital I need to start ($6500), but it may take 3 years or more if the business starts more slowly than I anticipate. 1) How should I go about requesting start-up funding?; and 2) If it’s granted, how should I set up the repayment arrangement? As a loan, or should I give the investor a stake in the company? What are the legal ramifications of the latter since he is not licensed to sell life and health insurance (is it considered sharing commission if he receives income from the business)?
3 Comments to “I’m planning on asking my grandfather to invest in my new business venture. Any advice?”
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On March 12th, 2010 at 4:14 am
You should NEVER ask a family member to invest in your business. If he offers an investment, that’s a different scenario. Why would you put your grandfather in the position of having to say “No” if he is uncomfortable with investing in your venture ?
Find your capital investment funding elsewhere and leave dear old Grand Dad out of the picture unless he makes an offer to assist you.
On March 12th, 2010 at 4:38 am
My suggestion to you is, to not do that to your Grand Father,, find the money elsewhere …
On March 14th, 2010 at 11:24 pm
Leave your grandfather out of it. He’s been burned once – that’s enough. Don’t embarrass him by making him either say no to you, or give you a loan he’s probably not comfortable with.