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Old May 5, 2013, 10:52 AM   #11
Frank Ettin
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Join Date: November 23, 2005
Location: California - San Francisco
Posts: 6,273
Quote:
Originally Posted by dakota.potts
...What I would do, however:

Offer as a reward, T-shirts with second amendment slogans. These could be as simple as "Come and Take it" or "Shall Not Infringe". These make surprisingly good incentives for donations. It doesn't have to be shirts. It can be stickers, hats, bracelets, whatever....
The thing is that it doesn't look like the OP's friend is asking for donations for a worthy cause. He's asking people to put up money to help him start a business at which he plans to try to make money for himself. In that context, the cash folks put up would not properly be called a "donation"; it's called an "investment."

Essentially, the OP's friend is looking for investors to help finance his business venture. He's picked a novel way to go about that, and it doesn't look like it's getting him too far. I'm not surprised.

Generally people looking to make investments are looking for a financial return on the money they invest, and they are looking for an amount of potential profit proportional to the risk that they might lose the money they've invested. So when considering an investment they will look for enough information: (1) about the person in whom they would be investing; (2) his skills and abilities, especially his business and financial judgment; and (3) the financial prospects of the proposed business.

So what is the OP's friend offering investors? He's offering product.

For an investment of $95 one gets the promise that sometime in the future he will receive an 80% lower. That might make some sense if I want an 80% lower to build a rifle for myself and the $95 price is sufficiently good that I'm willing to take the risk that it might be a long time before I get it, or I might not get it at all, or I won't be happy with the quality when/if I do get it.

But larger investments just get me the promise of proportionately more product. So for $4,500 I get the promise of 50 80% lowers. What am I going to do with 50 80% lowers? I'm probably not going to want to build myself 50 rifles. So I'm either going to build rifles to sell (so I better have a manufacturer's license), or I'm going to want to sell some of the lowers. So that would mean that I'll have to expend my time, effort and money (shipping, advertising, etc.) to turn my cash "investment" into a cash return. And whether that makes sense depends on how the numbers work out.

All things considered, I find this to be a rather strange way to structure a business deal.
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