- September 5, 2018 at 2:20 pm #240665
How much money can my investor invest in my business in Texas, USASeptember 5, 2018 at 2:26 pm #243016
Dock David TreeceModerator
To our knowledge, there are no limits in Texas for how much an investor can invest in a business. However, there are a few things that you should be aware of.
First, if you take outside money from investors to help fund a business, then you will owe them a fiduciary duty. This means running the company for the best interest of its shareholders – not yourself. In other words, you won’t be able to pay yourself unreasonable compensation or use the business for personal benefit.
Another thing to consider is that if you accept money from an investor in your business, they will own a part of your company. How much of your company they own will be based on how much they invest. If they invest too much, they may own more of the company than you do and be able to force you out.
Because of these factors, you may want to consider trying to find another way to fund your business rather than by taking money from investors. One way that you could do this would be by getting a business loan. You can learn more about that process, plus its costs and benefits, by checking out our article here: https://fitsmallbusiness.com/start-up-business-loans/
Something else that you might consider is tapping your own retirement assets to fund your new business. If you have assets in a 401(k) or IRA, there are several different ways that you can use that money to fund your new business. To learn more, be sure to check out our article on 401(k) business funding: https://fitsmallbusiness.com/401k-business-funding/
Just some food for thought. Best of luck with your new venture.