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Investing in a Startup
Posted on 7/21/14 at 8:29 pm
Posted on 7/21/14 at 8:29 pm
Met someone this weekend who had a product that's well thought out. It's in a large market. The idea is somewhat unique. It's two ideas in one. The brand is already trademarked.
This was his first time putting the product out in public (it was the first batch) and everyone at the event was talking about it. He wasn't ready for it; he ran out very quickly. My friend and I gave him our cards and we got his. We're very interested in investing and getting him in touch with the right people. He's currently just a one-man show based out of N.O. but using the LBTC Business Incubator at LSU.
So how would you move forward? What things do we ask?
My friend has a marketing degree from LSU and has been a lawyer for many years. We think this guy and his product have a bright future, but we want to be as diligent as possible. TIA.
This was his first time putting the product out in public (it was the first batch) and everyone at the event was talking about it. He wasn't ready for it; he ran out very quickly. My friend and I gave him our cards and we got his. We're very interested in investing and getting him in touch with the right people. He's currently just a one-man show based out of N.O. but using the LBTC Business Incubator at LSU.
So how would you move forward? What things do we ask?
My friend has a marketing degree from LSU and has been a lawyer for many years. We think this guy and his product have a bright future, but we want to be as diligent as possible. TIA.
This post was edited on 7/21/14 at 8:39 pm
2
Posted on 7/21/14 at 8:33 pm to ell_13
I've done this. To answer, all the normal items of due diligence one would do when buying a business.
One thing I've done on start ups the times I've been involved is make sure if I'm a director or officer they carry D&O coverage. Many times liability insurance isn't at the top of their priority list, so in order to protect your liability exposure as an officer to the extent possible, is to make sure you are covered on their directors and officers coverage.
One thing I've done on start ups the times I've been involved is make sure if I'm a director or officer they carry D&O coverage. Many times liability insurance isn't at the top of their priority list, so in order to protect your liability exposure as an officer to the extent possible, is to make sure you are covered on their directors and officers coverage.
Posted on 7/22/14 at 2:36 pm to Iowa Golfer
This is obviously my first go at it. My friend has a little more experience, and I'm looking up what I can on the internet. I was just wanting to see if anyone had any personal experience. Thanks for the heads up on LI. 
Posted on 7/22/14 at 5:10 pm to ell_13
I recently invested in a startup. Great potential and is already on shelves of Winn Dixie, C-stores, Walgreens etc.
He was not able to get funds to keep up and fill Purchase orders. Long story short, to eliminate my risk, I reqested personal guarantee/ promissory note. Required me to receive my initial investment + interest back in stock member's equity in 2 yrs. He signed
He was not able to get funds to keep up and fill Purchase orders. Long story short, to eliminate my risk, I reqested personal guarantee/ promissory note. Required me to receive my initial investment + interest back in stock member's equity in 2 yrs. He signed
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