There are regulatory issues that crop up if you start promising "return", such as securities laws for equity and lender laws for debt.
No starting business promises any investor more than 20% RoI. This crunches your cash in times where you fail to follow through, and can potentially lead you into wanting to perform a Ponzi scheme if you cannot pay yet do not wish to cut the contract (and incur any cancellation fees).
If you're not looking to sell a percentage of your company, you should just offer at most 10% or so, if it's six months. Investors will settle for that, as it's reasonable. If you're offering a yearly return, then 15-20%. This is enough to convince most investors that you have something for them, but are a newbie (17 years old, and never really been into business before).
Also, on the contract, offer to return their full investment if you cannot follow through. This will give them assurance and will increase their chances of investing in you.
If a sexy product idea you might get investors through a crowd funding site like http://www.kickstarter.com where you ca offer different rewards or contribution levels.
I wouldn't promise anyone 100% ROI. $14,500 is chump change to most investors, so you will probably need to borrow from your parents or friends. If you can give them 10%( $1450) in one year, that's a pretty good return on investment. They are taking a risk on you as a new unproven business. Do you watch the Shark Tank on TV? That might give you some ideas. You need a lot of help as you seem inexperienced.
Hello Ryan,
Since you are about to making business and trademarking in China, have you considered to find an agent to assist you to apply for the trademark? If you are interested in, please contact me via email lsip.sally@hotmail.com. I'm a IP agent in Guangzhou city, China.
Thanks!
Best regards,
Sally
I have created a new product and need an investment of at least $14,500 at the moment (For an NNN and OEM agreement, as well as trademarking my business name in China) so I can find a manufacturer.
I have showed a few potential customers my product and they all loved it and wanted to buy one right at that moment, so I believe I will make at the very least a few million in sales per year (profit of $3 on each product with 66 million potential customers (100% of all of these I have talked to have said they would buy atleast 3) (hopefully the first year I will make a couple hundred thousand in profit).
So anyways, this investment will do a lot for me to help my business get going (though it will not purchase the first shipment of products) and I am certain I will need more investments, though I just do not know how much.
I am not wanting to give equity of my business away, so I was just going to do a high ROI. Do you think that a 100% ROI is good for my investor? Hopefully returned in 6 months.
I'm new to ROI and everything, so if you think I am doing something wrong or it's completely irrational, please let me know!
Thanks!