Want to Invest in my Latest Project?

October 24, 2009 Posted by Tyler Cruz

I really have a self-control problem… it’s obvious that I’m already up to my neck in various projects and websites. It’s the main reason why my post frequency has been slowly dropping over the past year.

And it’s not like things are slowing down; my $10,000 investment on Movie-Vault.com’s revamp is nearing completion and will be launching in about a week which will require my focus and energy.

So why then have I just started yet another project?

I kept telling myself not to; that I already had more than enough on my plate, to say the least. And with the big revamp of Movie-Vault.com which I consider to be a massive project, adding yet another project to my list should have been the last thing on my mind.

But the idea kept finding its way back into my head, and I couldn’t get rid of it. When that happens, which isn’t all that often, the only thing I can do to stop thinking about it is to give in and develop the site.

And so here I am again, starting yet another project. And this one is pretty big, too.

The Project

Since I only decided to go ahead with the project today, I am not revealing very much about it yet since I don’t want others to possibly copy my idea and develop it before I do. As development progresses, I’ll reveal more information.

Right now, all I can say is that it’s a flash-based multiplayer game.

The game will be free but there will be a paid membership which is optional. I am considering adding two membership options, each being monthly. The “Bronze” will probably be somewhere around $1.99/month and the “Silver” $4.99/month. If the game takes off, it’s obviously easy to add higher-priced Gold and Platinum accounts.

In addition to the paid memberships, there will be ads on the site to help support the free non-paying accounts, which will most-likely account for 95% of the members.

Want to Invest?

For this project, I think I think I’m going to accept a limited number of investors – basically acting as shareholders, which is the reason for this post.

I have not yet received the quotes for this project, but I am assuming it will cost between $5,000-$10,000. So, it’s not the biggest project. Now, depending on the interest (or lack thereof) on investing in this, I may look to get the game done in a higher-quality and level of scale, and invest more into it, something like $10k-$25k, but I think that $5k-$10k should cover pretty much what is needed for what I want.

Investment Options

Note that nothing here is set in stone, especially since I have yet to receive the quotes for the project and the fact that I’m sure some of you will provide better insight into investment options and numbers.

I am basing the following options on the project costing $5,000:

 


Investment Return Buyout
$1,000 15% for 18 months 5x
$2,500 37.5% for 18 months 5x
$5,000 75% for 18 months 5x

 

I will only accept investors up to when the cost of the project is met (Ex. If 2 investors want in at the $2,500 level then it will be closed there).

The Return is based on site income, whether it be from advertisements on the site or paid memberships.

If you do the math, the site would need to make a total of $6,666 (bad omen? haha) during the first 18-months in order for you just to break even. This works out to an average of $370 a month. Therefore, if the site manages to make $13k during the first year-and-a-half, you’ve doubled your investment.

There will be a buyout clause, where at any point I can buyout the shareholder for 5x their investment. This buyout will be on top of any return they have received so far. For example, if an investor invests $1,000 and after 5 months I want to buy them out, they will keep whatever Returns they have made so far, plus $5,000 (5x) for the buyout.

The 18-month Return timeframe will begin once the site is finished its development and goes live to the public.

FAQ

Why do you want investors? Don’t you have confidence in your own projects?

This is the first and most natural question, and one that I’d personally ask if I were in your position.

I always have confidence in any project that I end up taking on, or I wouldn’t take them on in the first place. And I have already started the steps in getting this project started (I’m currently getting quotes). I’m therefore ready to fund this project entirely myself, but would rather have investors in this for 2 reasons:

1. I want to minimize my risk.

I already have a lot of money tied up in various projects (Movie-Vault.com revamp, my affiliate marketing efforts, and my other sites) at the moment and don’t have a whole lot of money to spend on new projects. I can and will fund this entirely myself if I need to, but would feel more comfortable if I had investors.

2. I think this would make for a good blog post series.

As ridiculous as this may sound, I can assure you this is true. I often do things for the side-benefit of it being good blog content, and this is one of those things.

I think it’d make for an interesting read to see how both investors in an online project fare from their investment, and how the project itself turns out.

I’m guaranteed to make money on this right?

No! You’re not guaranteed anything. Not a penny. You could invest the full $5,000 (or whatever it may be) and end up $5,000 poorer. This is an investment, and with investment comes risk.

The site could easily fail miserably, so you should feel comfortable with the investment and level of risk involved, and not have to take out a second mortgage on your house if you make nothing back.

Many of my projects have failed, so be prepared for that.

Wait a second, why do you get 25% for doing nothing?

First, it’s my idea and nobody is forcing you to invest :-)

But the main reason is that I’m not “doing nothing”. I am overseeing the project and while that may sound easy, I put in countless hours seeing that everything is done correctly. For example, just overseeing the revamp of Movie-Vault.com, I’ve already put in a good 40-50 work hours working with the developers.

As an investor, you’re the one doing nothing. I’m the one actually working on the site.

Do I get partial ownership of the site along with my return?

No. Merendi Networks Inc. retains full copyright and ownership of the site. Your investment is purely monetary and based on the site’s income.

How can I trust you to report the real earnings and pay me correctly?

You’ll have to trust me and have full confidence in me to report and pay the correct amount as this project isn’t big enough for me to set up some type of joint-PayPal account, etc.

I can give screenshots of PayPal payments, etc. and set investors up with access to the Analytics stats, but in the end you’ll have to trust me. If you’re even the slightest bit apprehensive about trusting me then you shouldn’t consider investing.

Give me some examples of your other projects that have made money

PublisherChallenge.com was my most recent project (since Movie-Vault.com hasn’t relaunched yet) and cost me roughly $7,000 to develop. At 10-months-old, it has brought in $55,000 to date.

PokerForums.org is around 5 years old and has cost me roughly $3,000 to develop and maintain. It has brought in close to $250,000 in site revenue.

TylerCruz.com is several years old and has cost me roughly $1,000 to develop and maintain. It has brought in over $30,000 in revenue, not including affiliate referrals.

Each of these are good examples of where the investment wasn’t very much, but the sites required a lot of my own time and effort. This is more evidence to respond to the “Wait a second, why do you get 25% for doing nothing?” question above.

Remember though, many of my projects have failed, so don’t expect ROI’s such as these to be guaranteed.

How would I sent you the money to invest?

This would depend partly on how the developer is willing to accept payment. If he is willing to accept payment from a variety of sources then having you send the developer the payment would be the best option.

Otherwise, I’d probably just have you PayPal me the money and I’d probably get you to pay the PayPal fees as well (2.9% + $0.30 if you’re from the US/Canada, otherwise 3.9% + $0.30).

I want to invest, but I have a few questions…

Contact me for any questions you have or if you’re ready to invest. I will only divulge details of the site to serious buyers.

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Posted: October 24th, 2009 under Miscellaneous  

52 Responses to “Want to Invest in my Latest Project?”

  1. Ryan says:

    Tyler,

    I wouldn’t even consider investing in something that I had no clue what it was. Most people would invest if it were a product they felt strongly about and wanted to participate in themselves. Without the main idea of the site being told I have a feeling you won’t find too many generous people willing to throw money your way.

  2. Ryan says:

    No, I read it. I don’t feel as if I should have to go out of my way to hear the idea you’re asking for money to create.

  3. I think I have to agree with Ryan on the investing on a project you don’t know too much about.

    Though, I guess I understand your point of view too, Tyler, simply because of copycats out there. But you publicize your other projects so I don’t understand why you wouldn’t on this one. Besides the fact its not even up and running yet.

    Jay

    • Tyler Cruz says:

      What’s so hard about sending me an e-mail? It takes 2 seconds. I just don’t want others copying my idea.

      I didn’t reveal what PublisherChallenge was until development on it was already a fair ways done. I’ll be doing the same in this case.

      I have already had a number of people contact me who are seriously interested in investing, some the full $5K.

      • Ryan says:

        Then why not ask for donations after development has begun so you can tell more about the project at hand?

        I love your blog and overall network but not enough to blindly invest into something only described as “a flash game”.

        • Tyler Cruz says:

          Ryan, I’m still not sure you read my last 2 lines of my post, heh. Or else I didn’t clarify them well – interested parties can e-mail me for a descriptive summary of the site I have planned.

          • Ryan says:

            I fully understand the final two lines. No disrespect or anything, I just don’t see the purpose of this post if all you have is an idea right now – not even a final price to develop the product.

      • Hey, I said I understood from both sides because of the whole copying your idea thing. Though, are you going to just give the information to anyone that e-mails you or just a select few? And if you are going to give it to anyone then wouldn’t it just be easier to mention it on your post?

        I’m just curious… don’t get me wrong, I’m sure its going to be a great idea but it sounds like the potential investors don’t have as much to gain as the risk.

        Jay

  4. Karl Hadwen says:

    No offense Tyler but it’s not the best pitch I’ve read, Probably would of been better for you to start at least a prototype of the project.

    I can’t see investors wanting to invest in something that has this much risk. It kind of sounds like you’re trying to rebuild that game you linked a while back.

    Good Luck Finding a Investor.

  5. Simon says:

    Tyler,

    Are there any flash games on the web that make a charge?

    I can’t think of any, you don’t generally pay to play a flash game on the web…

    • Ravi says:

      yes you are right normally people dont pay till they get addicted to it :)
      just take example of poker u get addicted to it and you will pay for sure to buy new chips

  6. Dana says:

    Tyler, I don’t have the money to invest, but I’m rooting you on. However, what’s to stop someone else from stealing your idea after the site is built, copying your game and cutting into your profits?

  7. Shawn says:

    Oh, this is one of the most asinine ideas I’ve heard yet. Tyler, I’ve read your blog since when you made the first post, but this is just too much.

    Your investors/suckers would have to be morons to go for this.

    First off, it is really hard to make money on flash games. This is known. It is possible if it get’s popular. So that is a tough sell right there.

    Basically though, it takes time for something to get popular. You obviously are going to be depending on word of mouth as your other sites are promoted, rather than paying for marketing out of your own pocket. You only pay your investors for 18 months though! That is just about the time it would probably take to get decently popular and profitable through word of mouth.

    Your investors/suckers get nothing after 18 months, and you will get complete ownership of the entire site for perpetuity (that’s forever), when it will be an established site and finally actually making some money.

    There are no cons for you and almost no pros for your investor/suckers unless it is a huge hit in which case you have a buyout clause just in case. The buyout clause is really just lotto fantasy designed to attract gamblers hoping for a big score. It is like the top top prize of those affiliate contests that nobody could possibly reach.

    Good luck to you, but I hope people are very wary of this and realize that this probably just about the worst investment imaginable on the Internet. You should at least allow the investor/suckers to continue to receive a return after 18 months if they have not received enough to cover their ORIGINAL INVESTMENT, don’t you think????

  8. If the idea is payed flash games then it probably won’t work

  9. Patrick says:

    I thought Tyler made over $100K per year from his Internet businesses over the last several years. I would think he can easily bank roll $5K to $10K. I don’t get it.

  10. Janice Happ says:

    Oh man, you must be really naive about the whole pitching/investment process.

    Unless your investor is an idiot they are not going to go out of their way to hear your idea. Everyone and their uncle Bob has some million dollar idea they want to pitch. In fact, you will have a hard time to even find a potential investor to even sign an NDA. ‘Ideas’ are worth nothing, zip, zero. It is the execution that matters. And from the looks of it, you aren’t going to be executing squat – “overseeing the project”? Get real! I would rather take my $10,000 and oversee the project myself.

    And then that brings up the question about control of the product. If I have a 25% investment of the product, I want to have 25% control of the direction of the product. That means having my say about what features I want, what direction to take it, etc.

  11. […] I did not include the FAQ and other information here since that can be read in my previous post. […]

  12. EarningStep says:

    nice project.. look like this will be a big project , good luck buddy

  13. John says:

    you’re going to ask for an investment (actually, a loan, since you ultimately retain all rights and equity) and then charge your investors the paypal transfer fees? er…..

  14. Paul B says:

    Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha. No seriously.

  15. Nick says:

    Your investment terms are a joke. I would NEVER invest in anything that had limited time returns and an optional, but required, buy-out. So basically your trying to limit your risk while screwing your investors. I hope no one is stupid enough to give you there money.

  16. wow you guys are some serious haters. If you don’t want to invest or think its a bad investment, go away.

  17. […] looking for some ’suckers’ who are willing to be investors for his latest project, a Flash based site. The terms are […]

  18. ARe any of the terms negotiable? I have extensive knowledge in investing in small businesses and I’d love to sit and talk.

  19. Need more details before I decide to invest

  20. Johno says:

    LOL, investors don’t even get a percentage share of ownership. Good one. Investors are taking all the risk. You won’t get a single real investor with these terms.

  21. Briefcases says:

    Interesting strategy asking for investors like this. Really the terms don’t sound very good other than the potential profit. Since the investor would have zero control, it is even more risky. I do like how you were willing to share the profit details from your other websites.

  22. Lee Ka Hoong says:

    Wow sounds like a big project that you’re running right now Tyler, I assume this is a big project which requires $50k-$100k modal to get started? ;)

    I don’t have much money to invest, I will invest if I have money. Anyway, wish you all the best Tyler!

    Regards,
    Lee

  23. Darn, I should have read this post first. A flash based game this huge will surely cost you the $20k+ that you were quoted. A simple 5mb flash game can cost that much.

    -Mike

  24. Selboy says:

    i wonder if there’s one investor who will invest with the project. based on the terms mentioned, it seems that if one will invest he should already consider his money being lost already.

  25. Kalvster says:

    You get no stake in the company? and there is no gurantee you will get a return..??

    In the investment world you either raise money offering equity or debt..

    So what does one get for their money?? no bond no stake in the company how would one know if they made money or not?

  26. nice project i really want to invest but i dont have any money.heheh maybe next time.

    Network Marketing

  27. John says:

    I don’t get it, Tyler, why don’t you DELETE or DISAPPROVE all these negative posts? Isn’t this a blog? Why do you allow them?! As far as I am concerned, most of them are just too negative. You should delete them! I would, if this was my blog!

  28. Negatives comments should still be posted. I think it’s good that tyler is letting people express there opinion even if it is negative

  29. Tyler,
    Are there any flash games on the web that make a charge?
    I can’t think of any, you don’t generally pay to play a flash game on the web…

  30. Magazin says:

    Tyler,

    Are there any flash games on the web that make a charge?

    I can’t think of any, you don’t generally pay to play a flash game on the web…

  31. SıcakHaber says:

    nice project i really want to invest but i dont have any money.heheh maybe next time.

  32. Keyif says:

    No, I read it. I don’t feel as if I should have to go out of my way to hear the idea you’re asking for money to create.

  33. SEO says:

    Please completely read.

  34. Adam says:

    Sounds like he has it funded and he’s rolling forward on the project. Advertising can easily pay for a 10k project over time…especially on a flash game.

    Add the flash game to facebook and he’ll be laughing all the way to the bank. Sounds to me like the pay accounts are just icing on the cake and may not be necessary to eventually turn profit.

    That being said, while I understand some of the negative comments I feel maybe they weren’t thought through carefully.

    Good luck on this TYler!

  35. bluemontoya says:

    If I had that kind of cash, I would definitely invest.

PeerFly

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