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I am thinking about investing in membership/partnership with a group of people in a new start up business. I need advise on return of profit with my investing of $10,000.00. Ownership Profits First 3 Yrs Profits After First 3 YrsReallocated Profits 0.00% 15.00% 15.00%John Doe #1 37.50% 26.00% 31.50%John Doe #2 37.50% 26.00% 31.50%John Doe% #3 10.00% 9.75% 8.50%Me 10.00% 20.00% 8.50%John Doe #4 5.00% 3.25% 5.00%Totals 100% 100% 100%
Optional Information: Country relating to Question: United States State (if USA): California
Good morning. What is everyone else contributing? Why do the percentages change?
JOHN DOE #1 Is attempting to obtain a Warrior Loan from the Veterans Admin. for $205,000John Doe #2 has not to this point contributed nothingJohn Doe #3 is an accountant/tax person has been given 10% in to the company to keep booksMe is contributing $10,000 for 10% interestJohn Doe #3 has contributed zero as for as I knowI am concerned of my contribution of $10,000 and how it decreases after 3 years into the company
Thanks. Given these facts, I would not be investing. One, there seems to me no justification for either the upfront percentages or for any decrease in the percentages going forward. Unless there are solid projections giving you comfort that you would receive an internal rate of return of at least 20%, this is not an investment a typical investor would ever consider.
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