Is a 50:50 split of profits between an investor and business owner ideal?

[Kera]

One of the of the challenges that business owners have with investors is always how to share profits. The profit sharing formula has kept many business owners and potential investors in disarray.

Do you think a 50:50 split of profits between an investor and a business owner ideal?

 

[Fidelia]

I know that most investors would think they should have the highest share. But a 50:50 arrangement is reasonable and keeps both parties happy.

 

[King Belieal]

If I am investing in your business from scratch, I would do a 60-40 profit sharing formula for two years and we renegotiate after that.

 

[eLdavis]

It depends on both partners, especially in a situation where both parties are putting in equal efforts, i believe its ideal.

 

[Min George]

It is dicey. One brings the creativity and the other brings the finance ms. One can't do without the other. 50:50 is ideal.

 

[Augusta]

There's nothing wrong with that but if you can negotiate to have 60: 40 then it would be a fair game

 

[Stardom22]

For me l would really accept that. That is because the rate is very fair so to speak.

 

[Xtynehappy]

Of course yes. I think that is the best ratio and one that can be motivated with the work too.

 

[Kross]

It depends on the level that you carried the other party from. At startup and I fund the business, you won't get equal share.

 

[Suba]

Of course, I as a business owner will reject you as an investor asking for a 50:50 profit sharing but you only contribute 25% of the total capital.

 

[Kera]

If the investor is contributing all of the capital and I am contributing the technical capacity, 50:50 split of profits is okay.

 

[Suba]

If the investor is contributing all of the capital and I am contributing the technical capacity, 50:50 split of profits is okay.

50:50 That is a fair split and has been applied in various small business partnerships, because the business owner only acts as a manager and only relies on skills, both technical and managerial capacity. The 50:50 split is also applied in livestock and agriculture.

 

[Miley]

50:50 is not a bad deal for both ends in the end. It could only be bad if the business owner has a bit of financial contribution.

 

[Augusta]

But sometimes these things depends on people involved. if you know that it is for good then it would not be a bad idea