I am starting a video production company after a few years of video editing for a hobby. Even though filming wasn't my main focus, it will of course be a main factor in the business and I have been training with a professional and studying for the past 2 months.
The time has come and I'm opening a production company. I did lots of research and came to a conclusion that I can get started with $7000, that would get me stuff like a camera, lights, mics, headsets, tripod, and all the other main equipment that I will want to start with.
Next week I have meetings with 3 different potential investers that are interested to invest the sum that I have come up for me to get this business on the road.
My question to you guys is the deal I should propose to these investers. Of course, there are many ways to do this so both sides benifit, but I wanted to hear from someone with experience.
I want to present different aspects of the deals and different deals as well so that they can start negotiating from. I will go over one thought real quick, to give you an idea where I'm at. Of course I'm not posting ALL the details of a deal and of course a lawyer will look it over, but I want some general direction. Again, I'm just throwing out general numbers and percentages. I want to hear from you guys what you think.
1. Invester gives me $7000. His overal profit from the deal will be $7000 (%100) He will get %50 of every event I do until I pay off in total $14000. ($7000 for his investment and $7000 profit). Once the $14,000 is paid, the deal is over. He has no partnershipin the business.
2. If I hadn't paid the invester at least $7000 in the first year, his profit from the deal will go up to %150. (saying that we agreed at first to %100 profit). If I pay him $7000 within the first year, his profit goes down to %80.
More can be added like what happens after 2 years and so on...