Four Questions You Should Ask About Private Equity – Question 1
There are four key questions we should ask when a friend asks us to invest in their new business. The first question is – When do I get my money back?
How many of you have ever had friends come to you and say, “I am starting a business. Would you like to invest?” I guarantee this: As you use the content we are sharing with you, as you become wealthier, you will have lots of people come to you.
The one thing that I am pretty much willing to bet is that you have never seen a book that tells you what to say when somebody says that to you. I have been reading books on these subjects for years and have never seen it.
Over the course of the years, I have lost a lot of money, because nobody taught me what I was supposed to say. We all need someone to mentor and coach us. None of us are so brilliant that we can figure this stuff out the first time without losing a lot of money.
You can learn from somebody else’s mistakes or you can learn from your own mistakes. Which is better? Other people’s mistakes are better than your own.
Today, I want you to learn from my mistakes. I have already paid the price for you to not have to pay it.
You are going to want to ask four questions to anybody who asks for your money.
The first question you want to ask is, “When do I get my money back?”
When you ask this,99% of the time the other person’s eyes will glaze over and they will go into a deep trance. You need to be looking at their eyes when you ask that question.
When they glaze over and go into a trance, then you need to take your wallet and put it deep down in your pocket, cover it with your hands, and run away as fast as humanly possible.
If the person has never thought about giving you back your money, they are not going to give you back your money. If they have never thought about it, it is not going to happen.
Do not invest with such a person EVER.
Even if they come up with another story later, it is too late. These are not people who are thinking about giving you your money back. Stay away from them.
I have just saved you a lot of money.
Now, if the person comes back with something like, “We are planning to grow the company for three to four years, and then we are going to sell it to one of these potential buyers. We are estimating, based on our business plan, that we should be able to create this kind of value. Based on your share in the company, this is the amount of money that you should be getting back at that time.” Has your interest in this discussion just gone up or down? It is going up, because this is somebody who has thought about giving you back your money.
In the next article we’ll discuss the next question you should ask – Have you ever done it before?
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ABOUT THE AUTHOR
James Skinner is a world-renowned business man and philosopher. He is recognized as one of the world’s foremost business thinkers and appears regularly on Japanese television. He has built two global financial groups that manage billions in client assets. His success is limitless, and he can show you how to achieve your own greatness. Get his valuable insight at http://www.IdeasThatCanChangeYourLife.com.