After my first read of the calculations, I'm wondering, have you considered the fact that a certain amount of profits need to be retained to repay investors their initial loans? (the amount of this will only be known when the durations of the loans are agreed)
Of course. If you check the business plan, you can see that after we've done the first 4000 units (which will also mean that all paid preorders are delivered), the full money is back so that any investor could pull his investment back out. This will probably be the earliest time I will put into the contracts.
We couldn't continue the production then, but there would be no debts left and if the demand is there, the product is established in the market and just some money is needed for 2 months, you can get a loan from the bank.
However, it wouldn't make sense for an investor to pull the money back after the first 4000 are finished - he wouldn't get a high profit.
Thanks to the paid preorders we need to deliver, profit after the first 4000 isn't much.
After them, the profit is a lot higher, as they will all be sold to new customers.
So basically, the earliest time to pull the investment back out would be end of 2012.
@WizardStan :
Not sure you've grasped the nature of the investment, from my understanding it is not in the form of buying shares, you can see that from ED's answer above of 'In our scenario, you would get back what you put in: 25 €.'
True. That's one possibility of investment:
The company is valued at a certain time (right now, it's 1,6Mio EUR).
If an investor puts in 10% (160.000 EUR), he will ALWAYS get 10% of the profit share.
His invested money doesn't change. Even in five years it will be 160.000 EUR, but he would get 10% profit, even if the new companies' value would be 20.000.000 EUR at that time.
The value of the company rises with the profit, so the investor would get A LOT of money, actually.
If the company makes a loss, the investor doesn't have to pay anything and the invested money he puts into the company wouldn't change as well. It would still be 160.000 EUR.
This is ONE possibility of a contract.
There is another one: Profit and loss sharing.
In this case, the money he invested will grow and shrink based on the profit and the loss the company makes.
If anyone is interested in that, I can offer that as well.
This is something that needs to be discussed individually with every investor and the contract needs to be setup.
The updated business plan data is much appreciated, thanks ED. I guess I'm still a bit on hold for the terms of the actual investment; I think it's pretty clear how the shares themselves are valued but I don't yet know under what conditions we can take back our shares (or when ED's company buys them). I presume they're not transferable like WizardStan originally said.
As said, this depends on the contract.
I guess most people probably just want profit sharing and get there investment back at some time, so this was the main thing I was concentrating on.
However, this is not fixed for everyone, if you want a different form of investment, we can discuss about that as well
