I started a business 3 months ago I invested $10,000.00 to start.?

I started a business 3 months ago I invested $10,000.00 to start the business is doing great but now I need more capital to keet it going. I have a partner that wants to invest in it, he is going to start by investing $6,000.00 and he will cover overhead starting next month. the overhead is about $1,700.00 a month he will cover it for a period of 12 months and no more, or he will cover it till the company can make it on its own but no more than 12 months. For 1 whole year he wont ask me for any money, but after that he expects to get pay. My question is he doesn't want interest on that money but he does want a percentage of the company what is the percentage that you think I can give him with out screwing myself. I will be the only one managing the company the only thing he is doing is investing his mone which it will be a total of no more than $24,600.00 that includes the $6,000.00 to start and the $1,700.00 a month for over head. He might only pay 6 months of overhead if need.

This is a very tough call to make. The 1st reponder mentioned that your time is a valuable consideration and it is, but you did not mention whether you were paying yourself a salary and if so how much it was.

It sounds to me like your partner is making a very large contribution toward your business. Maybe even saving your bacon. 25% in my mind would be the absolute minimum that I would even consider accepting. 50% would not be unreasonable given the situation.

Take it from there. Actually I am somewhat surprised an agreemen was not arrived at before now. Offer him 20% and see what he says. Any less would be considered an insult. If he is a businessman he will ask for 50%. 50% would not be unreasonable if you pay yourself a salary off the top.

His investment in money might exceed your own. But your time, effort and expertise are worth something too.

One way to apprach this is to calculate what your contribution in time and effort is and will be. I don't know what business you're in but take $20 a hour as an example.

If you work 50 hours a week your contribution in terms of time and effort is $1000 a week. You have already worked three months, so you can value your investment to date at $22,000.

If your deal goes for a full year, that's another $52,000 and your total contribution is $74,000.

His maximum contribution would be $24,600 or about one third of yours. So in this scenario his fair share should be a third of the company,

Adjust these figures to reflect reality and you have one way of valuing his contribution to your business.