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Updated over 6 years ago,
I plan to be a silent partner - typical/best arrangement?
Hi all,
i am considering investing in a small startup as a silent partner (on the order of $30k-$50k).
My question is, as a silent partner is it reasonable to expect a perpetual return as part of my involvement in the startup/beginning phase? In other words, once i have made back my investment plus a return on investment...does a typical silent partnership end or could i continue to receive a share of company profits "perpetually"?
Obviously an arrangement like that would be ideal, but it seems once my money is made back, my usefulness as an investor would be spent and I'm having trouble seeing why the business would want to keep me as an equity partner (why would they?). i have no interest in trying to interfere with the day to day, i just want the passive income.
i can elaborate as the comments dictate, but i wanted to keep it vague to get the conversation rolling.
Also, never invested as a silent partner so forgive me if my post isn't perfectly phrased, still trying to figure out the questions to ask here.
Thanks