Cake Biz Investor?

Business By kathy164 Updated 29 Aug 2009 , 7:32am by CutiePieCakes-Ontario

kathy164 Posted 27 Aug 2009 , 11:30pm
post #1 of 10

I have someone who wants to help me get started. Wants to give me money to invest into my little business. I am not sure if that is even legal. I would love the help but dont want to end up in jailhouse, and not in my cake house. icon_eek.gif Anyone else have any investors? Or any good advise on this>? Thank you, Kathy

9 replies
nanikins Posted 27 Aug 2009 , 11:43pm
post #2 of 10

All I can say is don't do ANYTHING without a contract and a darn good lawyer (not in that order). It's the only way to make sure that everything is legal and protect both of you.

PinkZiab Posted 28 Aug 2009 , 12:36am
post #3 of 10

Of course it's legal, but you MUST get your own attorney (someone who specializes in this field) and make sure the terms are negotiated fairly. This "investor" could wind up owning you if you're not careful.

nanikins Posted 28 Aug 2009 , 12:25pm
post #4 of 10

Thanks for being more literate and coherent than I was, Pink! I could hardly type for the bells and whistles going off in my head! Obviously I've been watching too many crime laundering actually crossed my mind. icon_redface.gificon_rolleyes.gif

As Pink said, it's certainly not illegal for someone to give you money, but one of the first acronyms a business student learns is TINSTAFL - There Is No Such Thing As A Free Lunch. Nobody is going to invest in your business out of the kindness of their heart. They'll be expecting something in return - a LOT of something, maybe. You could easily end up doing a whole lot of work and establishing a terrific business...for someone else.

Spuddysmom Posted 28 Aug 2009 , 12:39pm
post #5 of 10

Legal? Yes. Smart? Uh, maybe.... If this is a legitimate offer, has this person been watching Ace of Cakes and can just see all the Big Money that your little cake biz is going to generate? I'd think a lot about your relationship with this person first. It will likely change. Is it a family member or close friend? Are their expectations reasonable? What are they expecting in return? What is he/she like as a person - control freak? laid back? What are your expectations for your business?

indydebi Posted 28 Aug 2009 , 1:18pm
post #6 of 10

Is it legal? icon_confused.gif Unless the investor is Tony Soprano ........ ? icon_biggrin.gif

People invest in businesses all the time. What sent the flags up for me are two things you said in the first post.

(1) ... invest in my LITTLE business
(2) .... Is this even legal?

When someone describes themselves as "a little business", it sounds like they don't take themselves seriously. It sounds like they don't view themselves as a REAL business. ("Oh, I'm just a LITTLE business ... nothing, you know, REAL or anything!") That tends to be a woman trait .... we've been taught to be nice and not brag or blow our own horn.

If you think having a financial investor may be illegal, I question your business background and experience that would enable you to run a good business.

You might contact your SBA or SBDC office. They can offer some classes (sometimes free) in business, accounting, starting a biz, etc. I talk to them all the time and they are VERY helpful. They can definitely be a big help to get you the information and knwledge you might need. thumbs_up.gif

kathy164 Posted 28 Aug 2009 , 5:29pm
post #7 of 10

oh thank you all. I honestly do appreciate the help. I have been thinking this through so much, my brain hurts! LOL. I can say, that the man we have known for quite some time, came into a deal of money (lottery) and is just wanting to help out his friends. He is an older gentleman, not too old though, LOL and has no family. His lawyer told him he can do what he wants as long as it is legal. We would definitely draw up a contract for it. I am in a very small town. My business is out of my home. so I call that a little business. I am hoping to grow. Just was not sure if I wanted to take on an "investor" or try to keep doing things on my own. He says he wants nothing in return, that is where the contract will come in handy. I thank you all for your wonderful help. I very much appreciate being able to talk with you all here.

nanikins Posted 28 Aug 2009 , 5:47pm
post #8 of 10

Sounds like a wonderful man. Good luck with expanding your business, whatever you decide.

indydebi Posted 28 Aug 2009 , 6:24pm
post #9 of 10
Originally Posted by nanikins

Sounds like a wonderful man. Good luck with expanding your business, whatever you decide.


He sounds like someone who is wanting to "give back". icon_smile.gif

CutiePieCakes-Ontario Posted 29 Aug 2009 , 7:32am
post #10 of 10

Is he interested in "international" investments? icon_wink.gif

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