How can I invest in businesses?

shamblertine

I don't want to buy shares for companies listed on the stock market as I don't have much money to invest, only about €500 a month, and fees and charges would eat up most of that if I bought shares in companies listed on the stock exchange. So I just want to invest in new businesses and smaller businesses, anyone know how I could do this?

leitrim lad

you could appraoch a company director, and offer to buy a small stake in the company, whilst becoming a silent director, this may affect your prsi, based on the companies turnover,
and gradually everymonth your stake gets bigger , however you would want to be very understanding as to what your investing into, as many people would bite your hand off for money now a days,
for instance if someone approached me and said i want to invest in one of your companies, which has happened before, we would have to hold a board meeting, and have a vote on wheather or not to accept the investment and what benefit it would be to us, and the investor, then on making the decision and we accepted your bid , you would be issued with a document stating how much you invested in each transaction, and what stake this was worth in the company, sort of a cross between a bond and a receipt,
you could with the boards permission sell this document to a new investor at a price no less than what you paid for it, or else it would de value the company, or you could keep it on until you felt the company had grown and you would make a substansail profit on the sale,
i have done it before ,and i have ended up buying back shares in my own companies , not for any wrong reasons but the investor simply was strapped for cash so i struck a deal with them,
its not uncommon practise to buy a stake in any company, but you just want to be certain about the company and its directors.

you can pm me if you want more tecnical info

Lplated

leitrim lad wrote: »

you could with the boards permission sell this document to a new investor at a price no less than what you paid for it,

I'd be careful about this bit - it may come within the rules of selling shares to members of the public which requires a lot of detailed info to be generated and supplied.

Lplated

shamblertine wrote: »

I don't want to buy shares for companies listed on the stock market as I don't have much money to invest, only about €500 a month, and fees and charges would eat up most of that if I bought shares in companies listed on the stock exchange. So I just want to invest in new businesses and smaller businesses, anyone know how I could do this?

Have you actually looked into the costs of buying through an online account? It is possible to get your costs down to 30 per trade and less - so if you invested every 2 months, when you had a grand or so, the 30 cost wouldn't be that prohibitive.

I can see your thinking - the problem is the amount of money you want to invest. Most businesses looking for an investor likely wouldn't want X per month, they would want a lump sum up front.

You try just saving for a few months then look at something like the business expansion scheme which would let you invest in early stage companies and also might be tax efficient for you.

Alternatively you could join an 'investment club', where members meet monthly or so, agree to put in a figure each month, and plan their investments between them. There's a couple of hundred of such clubs operating in Ireland.

fiscalstudent

As the previous poster suggested investing in the stock exchange is no longer the preserve of the wealthy.

At www.sharewatch.com you can invest in companies for €50 per transaction up to a combined value of €15,000.

there is another option,if you have around €500 a month to invest then you are ideal candidate for sharebuilder, purchases can be made for as little as £1.50 with a regular investment plan. http://www.halifax.co.uk/sharedealing/products/halifax_sharebuilder.asp

I think both of these options are much safer than going looking for a private company to invest in.

antoinolachtnai

Investing in companies on a stock exchange is far more straightforward than investing small amounts in very small companies. As has been said, the fees are not really high anymore.

Remember though, that investing in shares is a risky business.

What leitrim lad says about investing in small private companies is generally correct, although there is a lot of detail to go through. A share in a company is quite different from a bond. The biggest problem (as he adverts to) is that there is no ready market for the shares you will end up holding, i.e., the only people you can really sell them to is the other investors in the company.

In general, you should not buy shares in a private company without independent legal advice at the very least.