How can my friends invest in my internet business and expect to get paid?

Question

I have an LLC for my internet site and I have friends interested in wanting to invest in my company but I don't understand how they make their money back.

Answer 1

If they invest in the business then thats your capital to use. They own [Y] percentage of your LLC because of their investments. You need to make profits out of their money and make bigger returns. That will mean each share they have in your LLC will be worth more. But if they pull out then you'll lose quite a lot of capital therefore reducing grow expectations. So basically. All you need to do for them to have a bigger return is make good profits. (There are many other factors but you will need to read about those in depth)

Try to keep a good return on equity. This will show them that your making use of the money they have provided to you.

Good Luck, Hope I helped.

Answer 2

You really need to speak with a lawyer.  There are different types of partnerships.  They will be compensated based on how you structure the agreement, but for both of your sakes have a lawyer help you.