Investing in a business

[contemporary]

A friend of mine has approached me to buy a share of his new business, he opened a food related business and hindered by objections to his business that were overcome, however the time this took ate into his resources as he had half a years free rent which was wasted by the objections.

The business now produces enough cash to cover its day to day expenses however the longer term commitments are in danger of not been met, lease on equipment, he as asked me for €50k. I will do the usual checks however Im wondering which is the best approach

a) pay €50k for the share of the business

b) pay €100 for the share of the business and pump the cash directly in the business

Im inclined to choose the latter, any opinions?

 

[mercman]

If it is advice you are looking for, don't get involved with a friend. Saying that if he wants to sell you a share for €50 k, is he going to pocket the money or invest it in the business. And now you want to make a choice of giving him 50 k for a share which you will probably never see again or give him the first 50 and then another 50 to pump into the business. And it's a cash business ? How are you going to manage the cash flow unless you want to make it a full time job. And if you hold an argument it become a worse friend case and you will end up getting bad mouthed to all your other friends. Bailing friends out, with the best will in the world just doesn't work.