- Joined
- May 9, 2013
- Messages
- 53
I'm looking at raising capital in order to roll forward, but do not have a good network to achieve this.
A friend (who is not experienced in real estate) is tapped into a very good network, and wants to help me raise capital. This will be his way of getting into real estate. He will get me facetime with the people with the capital... and because they trust him, and because he trusts me, I will have instant credibility with these people.
What is a fair way to split equity? He is one of my best friends, so I genuinely want to also use this opportunity to help him get off the ground. And I'm sure that once we get started, there will be more people in his network that we can continue to tap for capital.
I know... Thomas, you always say that the fair equity split is one that works for all involved. But can you please give me some examples of how experts have done this in the past? For example, instead of the regular 50/50 split between money partner and expert, are we now looking at a 50/25/25 split (money partner / expert / capital raiser)? 40/30/30 split?
Or does the "capital raising" role usually have a smaller split than the "expert" role? (particularly because his role is all upfront, whereas mine is ongoing). Not sure that I would like unequal equity sharing between us, though.
I'd rather do equity sharing with him than a "finder's fee", because I'd be willing to give up some of my profits in order to help him get off the ground and involved more in real estate.
Or is there another way to think about this?
Your thoughts are appreciated.
A friend (who is not experienced in real estate) is tapped into a very good network, and wants to help me raise capital. This will be his way of getting into real estate. He will get me facetime with the people with the capital... and because they trust him, and because he trusts me, I will have instant credibility with these people.
What is a fair way to split equity? He is one of my best friends, so I genuinely want to also use this opportunity to help him get off the ground. And I'm sure that once we get started, there will be more people in his network that we can continue to tap for capital.
I know... Thomas, you always say that the fair equity split is one that works for all involved. But can you please give me some examples of how experts have done this in the past? For example, instead of the regular 50/50 split between money partner and expert, are we now looking at a 50/25/25 split (money partner / expert / capital raiser)? 40/30/30 split?
Or does the "capital raising" role usually have a smaller split than the "expert" role? (particularly because his role is all upfront, whereas mine is ongoing). Not sure that I would like unequal equity sharing between us, though.
I'd rather do equity sharing with him than a "finder's fee", because I'd be willing to give up some of my profits in order to help him get off the ground and involved more in real estate.
Or is there another way to think about this?
Your thoughts are appreciated.