Legal Question in Business Law in Illinois

Business Investor

I met a man through Craigslist that is opening a teen dance club in my area. I'm a local DJ and was interested in performing at his club.

I visited the club and man this past week. Besides wanting a DJ he also wants me to invest 5k to 10k into his establishment.

The investment works at such: If I invested 5k, after the first 30 days of the club's opening night, I would recieve 2k and subsequently another 2k at the end of each month for the next 3 months. The total would amount to 8k.

The man (owner) believes that I need to do this so I will have a vested interest and do all I can to make the club a success. I am very interested because I need a job; however, my question is: Can I do anything legally to secure my investment? What if he jumps ship and bails? What if the club only makes it 2 months? Is there anything I can do to protect my investment? Some type of contract possibly?

Thanks.

Thanks.


Asked on 7/19/09, 11:03 pm

3 Answers from Attorneys

Re: Business Investor

I would never recommend "buying a job." If he is a credible professional, he would either 1) self-finance or 2) have people lined up to finance his business. I would simply steer clear of this guy. Way too good to be true. Would it need to be in writing, absolutely. I am guessing the guy would offer you a minority interest in this business. Accepting that interest is a bad idea. In a small company, a minority shareholder or interest owner has no control whatsoever. Too risky. You hit the nail on the head - he can quit, the thing can fail in two months, etc. You need a job, but you should not have to spend money just to get a job. Hope this helps.

Read more
Answered on 7/20/09, 10:44 am
Thomas Moens Moens Law Offices, Chartered

Re: Business Investor

Like any investment, you run the risk of losing your money. That is simply the nature of investments. Look at his business plans, do your own research, hire an adviser with expertise in this type of business. Perhaps you could ask him for a promissory note secured by sufficient collateral. Obviously though, if he had sufficient collateral, he probably would not be asking you for money, he would already have it.

Read more
Answered on 7/20/09, 11:23 am

Re: Business Investor

I would be very suspicious of this situation,especialluy if the ad did not mention an "investment". You need to do your due diligence in investigating this person, his criminal and credit background. This investment return sounds way too good to be true. Good luck.

Read more
Answered on 7/21/09, 12:04 pm


Related Questions & Answers

More Business Law questions and answers in Illinois