What to use the invested money for?


1

Ok so i am located in India and am looking for some investment for my startup. Since i am a one man company, i think i can move to valley if the investor/incubator (?) wants me to. But my question is can i use the invested money for my relocation? i am completely new to this btw. The 'relocation' will include travel charges, renting for a place for stay/work and a monthly pay for daily expenses. Are these valid uses for the money an investor would put in my company (my company, not me)?

EDIT well it is a fund and they need all of their portfolio startups to be based in the valley. they 'are willing to invest in companies which can relocate'. But that does not make it clear weather they will support relocation or not.

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asked Sep 16 '11 at 02:56
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Achshar
125 points
  • If you are an Indian citizen and don't currently have a US Green card -- don't forget that one can not simply move their start-up and start working in the US without the proper immigration paperwork (visa) -- it may not be as simple as adding it as an item on your to-do list. – Joseph Barisonzi 9 years ago
  • yes i understand that very well.. but us has a startupp visa that is not permanent. And i have read that the govt is not a (little) lenient for startups to go to valley because it leads to job creation (something US really needs right now) – Achshar 9 years ago

3 Answers


2

No.

Well, perhaps -if you were a superstar CEO being recruited. But as a entrepreneur you need to communicate that you understand that investor money is to be dilligently spent on the critical path items which will bring your company to the intendend stage (profitability?). Don't confuse that message with a laundry list of personal expenses.

You can pay those expenses from the agreed upon executive compensation you receive.

answered Sep 16 '11 at 03:47
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Joseph Barisonzi
12,141 points

1

If the investor wants you to move your company (and therefore yourself) to a better location for the company (and you agree) then it's a legitimate use of the money. Staff (you) can be reasonably compensated for moving under such circumstances.

What constitutes a better location for the company might be adjacency to a market, to investor oversight, cheaper premises, better premises, better internet connectivity, etc.

If either you or the investor doesn't see it as a better (more profitable) location, then it probably isn't a good idea. The investor is providing money to make money, and will expect the money to be used to make the business more profitable.

Whether there are visa limitations or tax implications of doing this is another matter.

answered Sep 16 '11 at 14:04
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Mike
946 points
  • well it is a fund and they need all of their portfolio startups to be based in the valley. they say that 'they are willing to invest in companies which can relocate'. But that does not make it clear weather they will support relocation or not. – Achshar 9 years ago

0

It is pretty obvious that an investor would invest as a means of getting a return on their money, which generally involves increasing the value of the business.

Spending the money on moving you from a cheap area to an expensive area will involve initial expense, plus much higher recurring costs. Unless you can demonstrate that it would add sufficient value, it is unlikely that anyone would agree to this.

answered Sep 16 '11 at 16:25
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Steve Jones
3,239 points

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