Raised $15,000 For My New Project So Far

August 12, 2015 Posted by Tyler Cruz

In my previous blog post, I wrote about how I was thinking of launching a new website based on an idea I’ve had for a while now.

There was a brief mention about how I might consider partnering with someone else on this project by taking on investors. It was just a small mention, merely a couple of sentences, yet I ended up receiving e-mails from a couple of different interested investors.

The first was interested for coming in at $15,000 but after following up with him he has not responded, and so I deem him as uninterested or at least not serious about it.

The second investor ended up being a contact who I’ve known for quite a while online… perhaps around 7 years or so. We’ve done a number of business transactions together before so there is some definite history between us there.

He has shown extreme interest in this project and actually just sent me another e-mail a minute before I started working on this blog post. He is also interested in coming on board for $15,000.

The Boring Stage

Our next step is to have him sign an NDA and non-compete, and then I will present an online slideshow presentation where I can demonstrate the website idea and my plans for the website.

Should that all go well, which I anticipate it will, we will then draft up an agreement and sign it under a local notary or lawyer as witness to the signings.

As such, this will be strictly be a profit-sharing deal, with no actual shares in a company or any other ownership exchanged.

The Return

So, here are the basic terms of our agreement:

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A $15,000.00 investment would yield a 50% return of the site’s net profits, paid monthly, for the life of the site, including any sale of the site. There would be a 10x multiplier buyout clause where at any point I have the option to buyout the investor for 10x of their original investment. This buyout would be on top of any return they have received so far. The buyout would cease the 50% profit share agreement.

For example (based on a $15,000 investment), in the scenario the site makes $1,500 net profit each month during the first 5 months and I want to buy them out, they will keep $3,750 ($1,500 * 5 = $7,500 at 50%), plus $150,000 (10x) for the buyout. They would have received a total of $153,750.00.

The same example as above, but this time based on a $9,000 investment (in which case they would receive a 30% profit share rate): $2,250 ($1,500 * 5 = $7,500 at 30%), plus $90,000 (10x) for the buyout. They would have received a total of $92,250.00.

He has the option of being a 100% silent partner, but has has expressed interest in taking a more active role and responsibility on.

Other Investors

With a $15,000 investment, not including the money and time I will be putting into the website myself, it is already enough to cover all development costs and a small bit of marketing and promotion.

However, should any other interested investors want to come on board as well, all the rates would change. Of course, other investors would only be allowed to come on board before I sign a deal.

For example, if another investor wanted to come in at $15,000 as well, I couldn’t give each of the investors a 50% cut since then I’d have no cut myself! Instead, the overall budget of the project would be raised to like $45,000 and each of the 2 $15K investors would receive a 33.3% cut.

The difference is that they receive a smaller cut, but the project’s budget is bigger which can mean a higher quality website and more advertising budget.

A $15,000 investment is not required. I think I’d be open to other amounts such as $5,000 and $10,000. A second investor coming in at $5,000 would probably get a 10% return.

In you’re a serious investor interested in coming on board this project, feel free to send me an e-mail. Please only contact me if you’re interested in investing a minimum of $3,000. It would also help and speed things up if you can provide some of your background. Please keep in mind that I am not going to be begging for investor money, this isn’t Shark Tank) – I am relying on my public history and reputation to vouch for me (whether that be good or bad!).

Anyhow, I just thought I’d share this little update, as it appears that my website idea may actually come to fruition…

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Posted: August 12th, 2015 under My Websites  

16 Responses to “Raised $15,000 For My New Project So Far”

  1. Richard says:

    Your “pubic history”? Surely that’s a subject for a whole new blog 😉

  2. Mike says:

    Sounds interesting, but as a serious investor I would want to be doing this through an llc with a specified member agreement, which would provide stronger legal recourse. Frankly, it sounds like it could be a difficult deal for yourself, since you are going to be working for free. And, if you aren’t working for free, then your investors must agree beforehand what your salary is going to be so we can figure out the net profit. That’s why many prefer a percentage of revenue to prevent shenanigans.

    Also, I would be careful saying a 50% return vs 50% of the profits.

    Good luck. Just be careful when dealing with investors because it can often create a lot of headaches for the one taking the money. I hope the upside is really worth the hassle for yourself.

  3. Mateen says:

    Cool man,

    I’m at the same point, starting a new project this Monday. It has massive potential but will need an initial outlay of 2-5k to make work and test the market.

    Good things to come I hope.

    All the best Tyler!

  4. Blue Tiger says:

    Why the hell you willing to give 50% of the revenue for such an insulting amount of 15K$ ? If that a breakout idea like you mentioned, 15 grands ain’t worth it buddy…

  5. Pete says:

    Hi Tyler,

    If you truly believe the words in your last post, then in my opinion, you wouldn’t be offering 50% of your profits for 15k. This tells me that you yourself have doubts about it. It is my belief that in order to succeed, you need absolute faith in your new idea. I’ve quoted you below.

    “It’s a website that has enormous potential… I’m talking about the sky as the limit. This is what gets me excited. It certainly has the possibility of “blowing up” in no time.”

    I know you’ve used words like “potential” and “possibility” but it seems to me that offering up 50% of your profits for 15k negates any credibility to your highly optimistic statement above.

    Why aren’t you getting a loan from the bank instead?

    • Tyler Cruz says:

      Of course I have doubts about it. It could easily fail and not produce a penny. That is why I want to limit my risk.

      I have the funds to produce the entire project myself, but I’d rather share the risk with somebody else.

      If the project was GUARANTEED to profit 200% ROI then obviously I would be sinking every penny I have into it.

  6. gen says:

    Hi,

    Why does it cost you so much to build a site? You can literally copy the design of any website on the internet with wordpress and outstanding theme and Drag and drop page design plugin for around 200-500 why do you need partners to fund?

  7. Mike says:

    The buyout clause turns me away. I understand you want a buyout option, but 10x of *investment* is not something that interests me. If it were 10x investment or 10x yearly profit, then it would make sense.

    E.g., what happens if the site suddently starts making 50k a month — then you can buy me out for 6 months profit. If it makes 100k, 3months.

    • Tyler Cruz says:

      If it made $1,000/month for 5 months then $50,000 in the 6th month and then I buy you out, you would earn $2,500 + $25,000 + $150,000 = $177,500. This is assuming a $15,000 investment with 1 investor.

  8. Hey Tyler,

    Teaming up with you is a great great idea and I want to team up with you but I,m too short of $3000, so may not be able to join now.
    Do you have any plans to get members on board after some time? Maybe I can join you then!

    Regards,
    Ashwani Kumar Singh

  9. Louise says:

    Hello Tyler,

    Do you think you could PM me what kind of website are you planning to build? What is the kind of investor you are looking for? Can it be someone from Europe?

    Thanks!

    • Tyler Cruz says:

      Yes, any country is fine. If you can e-mail me with some details about you and that you’re a serious investor, then I can have you sign an NDA and non-compete and send you the presentation.

  10. antalya seo says:

    Free does not work, you will have to understand why investors need to agree in advance what the net profit salary. It is preferable for the portion of the proceeds to avoid fraud lot.

PeerFly

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