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John
John, Attorney
Category: Legal
Satisfied Customers: 697
Experience:  Trial Attorney, licensed in FL, GA, & AL. Rated 10 / 10 by avvo.
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I am searching for investors to fund a project. I am wondering

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I am searching for investors to fund a project. I am wondering if it is legal for me to spend the first persons ivnestment money on more advertising to find more investors? I need a total of 28 investors

John :

It depends on what your terms and agreements were with that investor.

Customer:

The entire project is to drill a oil well. We need 28 inverstors and I was told by someone at my bank (who works with investors/accounts/etc) that a lot of investors - once they start getting funding....they begin spending in order to begin/complete the project. For instance - I told him that we were PLANNING on accumulating ALL of the money from all investors and then we would drill. He was saying that most people, usually begin the project setting milestones and one of the milestones is bringing in ALL the money and ALL the investors. --To do that - it helps to do more advertising say in the "LA TIMES" or the "WALL STREET JOURNAL" etc....so im wondering...as long as there is positive intentions....how does this work?

John :

The person spending the money on behalf of the company and the investors is basically a trustee. The investors trust and you must spend all money towards advancement of the project. Generally, if invested funds are to be used to further the project by obtaining more investors, the current investors musk know and agree. That is obviously a fundamental task, but it is not moving the investment along as agreed. You need to put the terms in writing.

Customer:

Section 3.1

Customer:

I need to revise that....now I am the "Class A" member (owners of the company, its actually my grandad) and our investors will be signing this contract. I need this section to make sense....basically each investor will put up 100K for partnership in a percentage of two wells that will be newly drilled. I have a few sections on this contract if you would be able to help me out, of course I would separate them, question by question, so it works better for both of us. What would be a better way to word this? My problem before - was that an attorney gave me the original contract (one he gave to a client that was using this specified LLC contract in regards XXXXX XXXXX building...I dont know if they were buying/selling/remodeling/developing...so anyways we got to the point of 7.7 and then he just *dissapeared* - so now I have only half of a contract....HOWEVER .....when we were editing....90%-95% of it - stayed the same.....so its all easy...I just need a little help finishing up. Right now this question is only for the help of section 3.1

Customer:

HOLY MOLY - haha - UM WOAH - on accident....I added a response from one question into your box, when your question was ready to be accepted. I will gladly accept. However - since I wrote all of the information into your question box, can you apply it to the following queston?

Customer:

I will gladly be accepting, in the meantime - can you answer that other question? If I need to get a hold of you, what is the best way to do so? Thanks.

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