Hi everyone. I have the tiny commercial operation I longed for to begin up as well as I longed for to suggest the great investment indication to my micro investors. I am seeking to lift $20,000. $100= 1 share.
So my indication is as follows,
40% of the monthly increase will go towards profitable dividends for 5 years.
The the increase have been generated by website subscriptions from internal commercial operation owners who will compensate $15 – $20 per month.
So is the dividends make up fair?
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Dividends are declared at the end of each quarter and depend on the profit. It would be best to consult an accountant before you make promises – you will not just be liable for the dividends but you need to have a stock buy back agreement because at sometime you will not want a lot of owners. You really just need a loan and selling stock is a way to raise capital, but you really don’t want someone owning a controlling interest. So cover yourself and spend the funds to hire an accountant to advise you – or a business attorney.
Sounds very fair
the dividend sounds fair, but it leaves out one important question, how much do you plan on paying yourself before declaring a profit?
Also, is this pre-tax profit? This can make a difference.
Your investors will probebly look for ~30% rate of return, i.e. 7K USD per year. The important things to answer is whether your financial projection supports that. I think you should postpone the technicalities (e.g. value of share) for later.
Hope it helps.