Has anyone ever taken on investors shark tank style? 0

[comicalgems]

I've been thinking of taking on/looking for investors in my comic business.  I'm just curious is there anyone here that has ever done it?  How'd it pan out?  Obviously the popular TV show Shark Tank has brought the whole idea of venture capitalism to pop culture.  It gives a somewhat transparent look at the way those types of deals are made.  I think I can come up with a pretty fair valuation for Comical Gems as an entity, especially if that person who is buying is getting X% of my comic and comic related item sales in perpetuity.  

 

I don't know, it's late and someone was griping about the new boards in another thread and how there's no hot topics in Comics General anymore so here I am trying to make one happen.  

[Jimbo749]

You would have to make strong case that the investor will see a return, especially dealing in collectibles.  I think distribution is the area that might hold some investment value, like owning a piece of Diamond Direct. 

[1Cool]

Explain your idea more.  Investors would own a share of your comic book collection or just the profits you make from selling comic books?  So if you sell 100 shares (for simplicity) then if someone buys10 shares they get 10% of your profits (after fees and costs) for x years?  People would obviously have to trust you immensely since you could just grab the money and then stop selling books and have no profits forever.  I've never heard of it but I'm always interested to hear how it goes.

Edited August 9, 2017 by 1Cool

[lou_fine]

11 hours ago, comicalgems said:

I've been thinking of taking on/looking for investors in my comic business.  I'm just curious is there anyone here that has ever done it?  How'd it pan out? 

Didn't Greg Buls proposed some type of investment concept like a comic book mutual fund back in the early part of the 90's that potential investors could invest in, without having to take possession of the actual comic books themselves?   

Since his concept was basically linked in with the hype and unrealistic speculation driven by both Wizard and Valiant at the time, needless to say, we all know what became of that idea. 

Edited August 9, 2017 by lou_fine

[F For Fake]

Ah, this seems like the perfect opportunity to once again bring up my favorite CGC crackpot thread: Comic Coin!

Comic Book Coin is Coming!

[shadroch]

What are 10% of your future sales?

Is the person buying ten percent of your sales or 10% of your future inventory?

Suppose the investor is unhappy. Can he sell his ten percent too some one else?

[mattn792]

2 hours ago, F For Fake said:

Ah, this seems like the perfect opportunity to once again bring up my favorite CGC crackpot thread: Comic Coin!

Comic Book Coin is Coming!

Holy excrement, some great entertainment in there.  I wonder what crackpot scheme that guy moved on to next...

[kav]

[comicalgems]

3 hours ago, 1Cool said:

Explain your idea more.  Investors would own a share of your comic book collection or just the profits you make from selling comic books?  So if you sell 100 shares (for simplicity) then if someone buys10 shares they get 10% of your profits (after fees and costs) for x years?  People would obviously have to trust you immensely since you could just grab the money and then stop selling books and have no profits forever.  I've never heard of it but I'm always interested to hear how it goes.

Organized into a LLC.  10% whenever a paycheck draw is given to owners.  Example, (for sale of simplicity) if there's a draw of $1,000 total for the owners, then the 10% stakeholder would receive $100.  If they wanted to sell their 10% then the other partners in the LLC get first right to purchase based on percentage owned.

So if there were three partners, two at ten percent, and one at eighty percent.  The owner with eighty percent gets first crack at buying shares, then the other 10 percent partner would get a crack at buying the shares, if neither were interested or able to produce funds to purchase within thirty days then the partner wanting to sell would be free to sell to whoever.

In my specific case it would encompass all comic book and pop culture items procured for the express reason of reselling.  This includes revenue generated through online sales, conventions, and any future brick and mortar ventures.  

Thats the basic way I envision a partnership.

[comicalgems]

4 hours ago, shadroch said:

What are 10% of your future sales?

Is the person buying ten percent of your sales or 10% of your future inventory?

Suppose the investor is unhappy. Can he sell his ten percent too some one else?

I'm thinking 10% of everything.

[Hudson]

The BIG question is....

Are you drawing a paycheck BEFORE dividing any potential profits?

[comicalgems]

10 minutes ago, Hudson said:

The BIG question is....

Are you drawing a paycheck BEFORE dividing any potential profits?

Profits would be the LLCs money.  No one owner gets paid unless every owner does.  

[Hudson]

15 minutes ago, comicalgems said:

Profits would be the LLCs money.  No one owner gets paid unless every owner does.  

Perhaps I am missing something. Please forgive my ignorance. 

It seems that someone is doing the buying, selling, shipping, setting up at conventions, etc.   

is that person going to be you or rather is at least ONE of those people going to be you?

If the answer is yes, then would you bestowing a paycheck for all this work and taking that "pay" off the top, before putting the rest into the profit pile to be divided by the owners (perhaps paid out as dividends or whatever)?

This is a key question.  If you are doing all this work, then I would think you would expect more for your efforts than a person who just throws some cash in the pot.   By the same token, an investor needs to know that this "salary" would be reasonable enough so that they would still see a fair profit. 

 

[Diamonddave]

What $ amount are you looking to raise? How many investors (owners) are you looking to partner with? What is the valuation of a share of the company? Do the investors have a say in what is purchased and what is sold? How much of the % of capital is expended on a purchase or show?

[comicalgems]

27 minutes ago, Hudson said:

Perhaps I am missing something. Please forgive my ignorance. 

It seems that someone is doing the buying, selling, shipping, setting up at conventions, etc.   

is that person going to be you or rather is at least ONE of those people going to be you?

If the answer is yes, then would you bestowing a paycheck for all this work and taking that "pay" off the top, before putting the rest into the profit pile to be divided by the owners (perhaps paid out as dividends or whatever)?

This is a key question.  If you are doing all this work, then I would think you would expect more for your efforts than a person who just throws some cash in the pot.   By the same token, an investor needs to know that this "salary" would be reasonable enough so that they would still see a fair profit. 

 

Oh okay I understand now what you're asking.  Yes I would be the person doing all those things which I already do.  Ideally salary would not exceed X% (to be determined) of profit per quarter.  That would be the "draw", which would then be split by ownership percentage.  If at such a time it becomes necessary to employ additional people a unanimous decision would need to be made as to what that person(s) would be paid.  So no as an owner that is working for the company there would not be a salary on top of the "draw" at least until such a time that profitability would warrant it.  

[comicalgems]

29 minutes ago, Diamonddave said:

What $ amount are you looking to raise? How many investors (owners) are you looking to partner with? What is the valuation of a share of the company? Do the investors have a say in what is purchased and what is sold? How much of the % of capital is expended on a purchase or show?

Excellent questions.  Amount looking to raise would not exceed 20% of the valuation.  Preferably no more than two partners.  The investors can be involved in any major purchases, but no brainer purchases such as a key issue for pennies on the dollar will be left to the majority shareholder.  "I had to pass on a long box of ASM 300 that I found in a warehouse because I couldn't get investor approval for the $200 expense" would not be a scenario that would be encountered.  "I couldn't purchase that deal in Omaha because the investors didn't want to spend 75% of our cash on one deal" would be something I would expect by taking on partners.  

I would say that ideally purchases and expenditures would need to remain conservative.  However, ultimately this would need to be hashed out prior to partnering if there's a specific threshold a partner wants to stay under.

[darkstar]

You would be far better off coming up with an accessory for comic books than just using your comic selling business itself. Something like that one guy who came up with clear backing boards.

[shadroch]

Are you looking at a four, five or six figure investment?

[kav]

I would be willing to invest one figure.

[Kevin76]

2 hours ago, comicalgems said:

I'm thinking 10% of everything.

10% isn't enough for an investor to put up X amount of thousands of dollars. You're looking at least 30% . You have to remember, the investor doesn't do anything for your business, it's all on you. They put up the money and expect to kick back while you pay them 30% for as long as you're in business.