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Investors 100k

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  • 27-10-2011 12:03pm
    #1
    Yrag2E
    Registered Users Posts: 154 ✭✭


    Hi,

    could any one tell me what (roughly) would be the return for an Investor putting in 100k would be?

    Not a share in the company but something like a 5/6 year return?

    Cheers


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    #2
    MidlandsM
    Banned (with Prison Access) Posts: 5,737 ✭✭✭MidlandsM


    need more detail than that


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    #3
    maxer68
    Closed Accounts Posts: 1,076 ✭✭✭maxer68


    An investor can get a risk free return of almost 5% a year on deposit.

    They can take a punt on the property market and get returns of 10% a year +/- any growth/contraction in the property price.

    So a risky business investment will need to be way over this and possibly they would need to see a 20% return per year.

    Another option is to put the investors 100k into a high interest bearing account - the company take out a 100k loan over 5 years with the other 100k acting as collateral.


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    #4
    Yrag2E
    Registered Users Posts: 154 ✭✭Yrag2E


    so should elaborate.

    I have an oppurtunity in an existing business which already proven to work. I want to get an investor on board. 100k. What are the investment options.

    Monthly Return on 100k + Interest
    Yearly Return on 100k + Interest

    over 5 years/6years.

    Bit like a bank loan but a lot higher interests. 20-33%

    I don't know much about investors so any help is appreciated.


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    #5
    Boskonay
    Registered Users Posts: 115 ✭✭Boskonay


    If the business is proven - it would be a lot simpler to raise bank debt / financing.

    An investor will want either some security (like a large equity share) or a very high return (20-30%+) per annum to justify the risk.

    Consider they can earn 5% on deposit with total security and 10-20% in 'safe' options like bonds, funds, etc.


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    #6
    Yrag2E
    Registered Users Posts: 154 ✭✭Yrag2E


    Boskonay wrote: »
    An investor will want either some security (like a large equity share) or a very high return (20-30%+) per annum to justify the risk.

    is this 20-30% of 100k or 20-30% of net income per year?


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    #7
    antoinolachtnai
    Registered Users Posts: 9,801 ✭✭✭antoinolachtnai


    A return of that percent on their money, i.e., 20-30k per year. And to get their original money back at the end too.


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    #8
    YouBuyLocal
    Registered Users Posts: 293 ✭✭YouBuyLocal


    antoinolachtnai wrote: »
    A return of that percent on their money, i.e., 20-30k per year. And to get their original money back at the end too.
    ... varying based upon their perception of risk, including the team involved in the venture and the growth of the market/product/service/etc. All depends on how you negotiate, as in all things I would speak to as many potential investors as possible to get the best terms. Some will rip you off if they can. Speaking to more potential investors will give you a better idea of what are particularly reasonable terms based upon your particular business. Risk is all about perception after all. One person's risk could be another's certain return, these things only come partially down to metrics.


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    #9
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    antoinolachtnai wrote: »
    A return of that percent on their money, i.e., 20-30k per year. And to get their original money back at the end too.

    This type of rate would make a credit card company blush. Not saying that's not the going rate, but don't know many companies that could afford such a rate.


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    #10
    Boskonay
    Registered Users Posts: 115 ✭✭Boskonay


    If the OP can get 100k credit on a credit card, then that's an option :p

    Any investment will cost relative to the risk.

    A typical model will be a chunk of equity as security, a 15-30% rate of return, etc.


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    #11
    EamonOSullivan
    Registered Users Posts: 101 ✭✭EamonOSullivan


    Fair point S McGiff, but the credit card company can pursue you personally if you don't pay them back, and they are not guaranteed to make any interest from you - you might pay on time. Also a credit card companies make money every time you use the credit card, by charging retailers. You are comparing apples and organges.

    OP you should explore other options, which though costly could still be cheaper than an investor. Eg invoice discounting if that applies in the business you are going in to. You could borrow a small part of the 100k you seem to need from the higher cost source, then go to the bank to borrow the rest, say get a 25k investment and then borrow the 75k balance somewhere else.


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    #12
    TheCostumeShop.ie: Ronan
    Company Representative Posts: 1,740 ✭✭✭TheCostumeShop.ie: Ronan


    If you are not looking to give away equity then it's not really an investor you are after is it, its someone willing to give you a loan. Investors invest in business's with the knowledge that 9 out of 10 fail and it's more about the management behind the idea than the idea itself. To subsidize the other businesses which may not succeed they usually expect high returns as part of portfolio theory. A 30% return on a start up, unsecured, could be a bad investment. Also who would get paid first? Suppliers and Staff I assume, but then does the entrepreneur get any wage before the investor gets his money out... and if he doesn't get a wage would they keep motivated for long while their children go hungry...

    It sounds like what you're really after is a bank loan so best to start there or if you are planning on borrowing money from a family member and trying to decide what a reasonable ROI is then it's really down to yourself as motives for investment are clouded.


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    #13
    newmug
    Banned (with Prison Access) Posts: 3,571 ✭✭✭newmug


    What about if you had 100K lying around, and were looking for a company to invest it in? How do you do that? Is there a service where investors and entrepreneurs can meet up?


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    #14
    TheCostumeShop.ie: Ronan
    Company Representative Posts: 1,740 ✭✭✭TheCostumeShop.ie: Ronan


    newmug wrote: »
    What about if you had 100K lying around, and were looking for a company to invest it in? How do you do that? Is there a service where investors and entrepreneurs can meet up?

    Stock Market? If you aren't an experienced investor and dont have enough to diversify your loans theres a good chance of loosing your money. Might be worth considering Lending Club - I Love that company.

    Pity there isn't an Irish one. Anyone here fancy inventing one?


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    #15
    YouBuyLocal
    Registered Users Posts: 293 ✭✭YouBuyLocal


    TheCostumeShop.ie: Ronan wrote: »
    Stock Market? If you aren't an experienced investor and dont have enough to diversify your loans theres a good chance of loosing your money. Might be worth considering Lending Club - I Love that company.

    Pity there isn't an Irish one. Anyone here fancy inventing one?

    I think smallbusinesscan want to do that. Talking to one of the guys a while ago and he mentioned it.


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    #16
    newmug
    Banned (with Prison Access) Posts: 3,571 ✭✭✭newmug


    YouBuyLocal wrote: »
    I think smallbusinesscan want to do that. Talking to one of the guys a while ago and he mentioned it.


    Bloody hell, keep us updated on that one!:eek:


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    #17
    YouBuyLocal
    Registered Users Posts: 293 ✭✭YouBuyLocal


    When I talked to him it was early summer late spring. He said it would be live in September, but you know how these software developments can be under-estimated by non-software people.

    Come to think of it it was more of a crowd-funding platform for business, but I'd say the structure of it would be similar to a lending platform like fundingcircle.co.uk. I'm not sure how that would interfere with their relationship with Ulster Bank.


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