Angel Investing & Venture Capital Equity investment into a business

I have lots of medical professionals, particularly surgeons, as clients.

Financing has never been a limiting issue in expansion.

If the reasoning is having practitioners get some skin in the game then I can see that making sense.

If only for the money then 2% says to me they want lots of people's money without ceding any control.

 

Wukong - I just sent you a private message attaching a client checklist for DD items.

 

What type of "facility" is this? Super-clinic, day procedures, consulting rooms?
Why are you convinced there will be a demand for it?

The explanation of the reasons for this doesn't really make sense to me - if it's being done to try and attract people to work there through profit sharing, it makes no sense. There are plenty of places around for medical practitioners in private-land which include profit sharing arrangements as part of the compensation structure without the need for equity in the underlying business - why should people prefer to work at a place that involves an investment on their part?

This could certainly just be trying to capitalise on people feeling that if they invest somewhere they work then they have more control over the investment and confusing that with it being a better place to work? Many of us are certainly vulnerable to thinking of that sort, but it's still not a great explanation as to the reasoning. Most of the large, successful, traditionally-structured practices (owner principals) I know are fairly tightly held and shares only change hands when someone retires.

Given what you've mentioned in the posts this far, I presume that you or your partner is a medical practitioner of some type? Is this a place you/they currently work? If not would you be moving there solely or keep some positions external to it? Certainly if you're going to end up working only there then there's also a big concentration risk to be taken into account from having a large investment and a salary from the same organisation...

It seems a lot of risk to take on in an area currently unfamiliar to you in exchange for "bonus shares" and a forecasted 300% return (which means absolutely nothing).

 

@ACMH16 valid concerns. This speaking from experience?

No concentration risk because work is few locations, which is the norm.

The feedback thus far is generally negative (which is valid) but we have to start somewhere right If it's all negative, there would never be successful business owners.

Does anyone see opportunity in this?