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Investor Agreements

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For those of you that have investors, do you mind discussing what type of agreements you have with them? Percentage of the business? Length of investment and return? Etc... We are a very small scale operation that is just starting to look for funding and appreciate any help in determining what a fair offer in would be.

If you would prefer to keep it private, feel free to message me.

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  • 2 weeks later...

From another post...

There was a capital venture lecturer at ADI 2015 about just that subject...he had a very good alternative plan. Works just the opposite of the recent mess's.

While it wouldn't work with a SHARK, it weeds them out and makes for better, more honest, investors.


Never finance the distillery directly. Finance the debt of the company. Offer investors shares like a CD at 5%, to put up say $100,000. They own shares of the company's equipment, but never the Company! They get paid on a schedule or can forgo payment and have their number of shares increase as others get paid out. They have the safety of hardware as collateral.

They get better return than a bank is paying. They get to say they are part of a sexy distillery business. The distillery never loses control.

Under a more traditional buy in, every time the distillery expands, the founder's ownership is diluted, until he no longer has controlling interest.

While not exactly the same and on another note...my business does this for liability reasons, owns almost nothing and we have a leasing company that owns almost everything. So the biz is always in debt to the leasing company. Every bit of profit gets paid out! Every new expansion gets financed! Sue me out of business or hostile take over and you get...my debt. Now...investors need you!



You and your attorney write the contract and give it to the investors. That doesn't mean you write anything into it to screw them. But it does mean they can't write anything into it to screw you.

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