An offer to be a silent partner

[RawDepth]

This may not be the right forum but...

An acquaintance is offering to invest in my website as a silent partner, (obviously because he sees potential there.) I sure could use the money for promotion but if it would happen to fail, I don’t want to owe him all that money. I will likely decline the offer, but I am now curious about how it should work.

Can anyone put in plain words the typical roll of a silent partner and how much influence they might have over the direction of the site?

[webcosmo]

Silent partners generally does not try to dictate how you run the business. But if they find out they are loosing money, possible that they would step into the scene and try to dictate. Generally they have money, and like to invest on something they find prospective. Its always better to deal with somebody you know.

[lordofdalord]

Silent in what sense?

[skysoldier]

Originally Posted by lordofdalord

Silent in what sense?

I think what he must do is to settle a deal with the potential silent partner about the limitations of his power in the business, this sleeping partner must not interfere with the one handling the business outside!

[swapw]

Originally Posted by RawDepth

This may not be the right forum but...

An acquaintance is offering to invest in my website as a silent partner, (obviously because he sees potential there.) I sure could use the money for promotion but if it would happen to fail, I don’t want to owe him all that money. I will likely decline the offer, but I am now curious about how it should work.

Can anyone put in plain words the typical roll of a silent partner and how much influence they might have over the direction of the site?

RawDepth,

Here are a few things I would suggest:

1. Draft an official contract between you and your silent partner on who's in charge with what

2. Decide which percentage of the company should be owned by who and what

3. Draft up a plan and be sure that this plan works! A good way is partner up with veteran Webmasters to maximize your results.

Always talk to a lawyer and draft something you both agree. Doesn't matter how close you are, to maintain balance and to protect yourself this is your best bet. Best of luck!

-Swapw

[ordinary m]

As the previous poster before me stated, get a lawyer to draft an agreement. Put it in black and white.

[Steven_D]

dont take money off friends, there is no friendship that will endure money issues.

Also friends tend not to be as silent as they should be.

From a legal stand point, incorporate the company, sell a shareholding to him which means the debt belongs to the company, if it all goes tits up then the company goes bankrupt not you, unless he can prove that you acted irresponsibly as a director of the company.

Dont take the money if you don't plan on incorporating the company as there is no point in taking on personal liability because money is piss simple to generate without debt.

[skysoldier]

Originally Posted by Steven_D

dont take money off friends, there is no friendship that will endure money issues.

Also friends tend not to be as silent as they should be.

Ok, For me I tend to be a silent partner with my friend!