Purchasing shares? I got a email a couple of days ago from ED saying "profit shares". Thats two completely different things.
Well, since I only know the German words for everything, it might be I mistranslated it. Then again, that's exactly the reason why some lawyer specialized on English translation translates the contract.
If I'm informed correctly, this is called "shareholder loan" in German.
You will get a fixed interest rate of 4% on the money invested as well as a share of the profit made.
Look... this is not a real investment, then you would let up shares of the company. As someone else wrote this is more of a loan with poor conditions. And whats this about estimating the value of the company to 1.6M euro!? What is worth anything besides some goodwill for developing the Pandora? There is only a possible future profit that is highly unsure. Any potential investor that doesnt really question your est. value does not now what they are doing.
Do you have some special knowlegde about that? Maybe it's different in Sweden than in Germany.
I'm working on this with various people. A lawyer, who made a lot of such contracts already and actually has invested in various bigger projects as well himself, a tax consultant who helped about 50 start-up companies with fund raising and business plan creation so far (most of them were successful!) And I'm getting help from the centre of business pioneers, a company that just exists to help start-ups getting everything done correctly and raising funds, which has a huge network of business specialists and successful but now retired company owners.
And I'm in contact with a company that just lives from arbitrating between investors and companies - and guess what: They also think this is looking good and have two major investors already that are interested and want to take a look at the Pandora.
The methods and rules to value the worth of a company are part of the business laws in Germany, and that's exactly how this value was calculated by a commercial expert.
A shareholder loan is the most common form of fund raising for startup companies. There are even networks of venture capitalists looking especially for such types of investments (those are called business angels)
Sorry to tell you, but this is no child's play with poor conditions, this is a serious typical startup-business.
I also wonder where you have these poor conditions from?
If OpenPandora GmbH makes 100.000 EUR profit next year (which will be done with just selling 2000 Pandoras), then you'll get an interest from your investment of 9,56%.
6000 sold Pandoras would result to 26,21% and 10000 would be over 40%.
I wonder what's so poor about that conditions?
Here in Germany, they are pretty good.
If you dont let up shares potential investor cant even be sure of their share from the potential profit. Even if there is a profit. Its all to easy to cover the profit with "natural costs". And now dont be foolish, there is no such thing as trust when it comes to serious business. Be sure to have formal agreements on everything, for everyones safety. I cant see how the profit could be assured (if there is one) without selling shares of the company.
Well, that's how about 90% of all startup companies in Germany are being done. But then again, I don't see how this would be different if you own shares of the company.
Minimizing the value of the company or reducing the profit can ALWAYS be done with spending money on something.
However, there's a 4% fixed interest rate additionally to the profit share.
Also, while I sure plan to use some money for development and stuff like that, I offer the investors to discuss about my ideas and will be influenced by what they want.
This is uncommon for a shareholder loan, but I want to work together WITH the investors, so I will also respect their opinions and ideas about different things.
I was probably one of the first to make contact regarding investing in the Pandora, about a year ago. I was ready to form a group of Swedish investor for this cause, but I had a completely different value of the company in mind and took for granted that shares would be let up.
For me this is completely crazy. I would never lend you this kind of money under these conditions, it would give me nothing but a great risk of loosing the money. I hope any potential "investor" thinks twice before doing this. If you're in for making investments try out the stock market instead, regardless of the daily value you will always OWN your shares.
Well, no idea if it works totally different in Sweden, but as said, here in Germany, this is a very common form for starting a business.
That's what the business angels network is for.
They've got it very well summarized on their website here:
http://www.business-angels.de/default.aspx
"
Business Angels sind hier mehr denn je gefragt. Sie finanzieren Innovationen in der Frühphase. Sie sind bereit, das Risiko zu tragen und den Aufwand auf sich zu nehmen, weil sie – neben Renditeorientierung – Spaß daran haben zu sehen, wie sich junge, viel versprechende Unternehmen entwickeln."
Translated to English:
"Business Angels are in demand more than ever. They fund innovations in an early phase. They are ready, to bear the risk and effort, because they are not only interested in the rate of return, but also are delighted to see how young, promising looking companies evolve".
No one forces you to invest into the Pandora, though. If you think it's crazy, then you probably shouldn't do it.
But then again, investing into almost any start-up company is totally crazy.
You stated that you will try to get investments of 300K - 350K EUR.
I'm wondering if there is an end date for investments. If you want to calculate the percentage of the investment (in order to pay the profit) you have to know the total amount of the investment.
I've not yet set a deadline, though I will probably stop taking investments once I get more than 400K EUR. I
As I'm also checking for a possible bank loan (would work out as well if there isn't too much money left to raise) as well as governmental fundings, it might be I won't need 300K - 350K.
Will it be possible to do additional investments? And if so, how will this influence the percentage of the profit of the early investors?
If things go well maybe new investors will be interested, but they would take less risk, and reduce the percentage of the early investors.
I could take additional investments for the rest of 2011, as no profit will be made before 2012. The value won't change until then, so investments are still possible.
After that, I will not take new investments, simply because the company would have to be revalued each time a new investment would be needed - and that costs money.
If you would have transferable shares, their price could fluctuate with the profit of the company. And future new stock emissions would probably be easier.
What are your thoughts?
As we're living in Germany, there's a lot of bureaucracy going on here.
To properly set up something like this would take months, and we don't have months...
i keep like checking the site to see if its up already.. been at it for 3 days now -_-
