My friend asked me to invest in his trucking company as they have an opportunity to acquire a much larger trucking company but he needs capital. He's offering me equity investment or a structured loan. What are the questions and information I should be asking to 1) decide if his business is worth investing in and 2) which type of investment would be wisest (I'm more interested in passive income from dividends or other profits l

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Ask for audited financial statements. Look at what EBITDA multiple he’s valuing the business at. If he’s using forward multiples, check the growth assumptions baked into forward projections.

Before I do any of this, I would question why he’s not taking out a loan for the merger rather than offering you equity.

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If you see me in a brand new Mercedes next week, that wasn’t your money. I started that whole process a month ago and is totally unrelated.

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Hire a banker

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I’ll do it for 1%

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