Why I’m afraid to invest in my friends company

Last Tuesday, one of my friends ask me whether I’m interested to invest into his company. His company is Enterprise and will be upgrade to private limited company. He show me the profit expectation of his company.  The minimum investment for his company is RM5,000 per unit and he sold 200 unit which means he could gain capital around RM1,000,000.00. From the projection, he said that I could earn around 15% profit a year and it means I could earn profit around RM3,000 if I’m invested for RM5,000 or 1 unit.

|What is Private Limited Company |

It sound PROFIT . I know he has a good company. A company which is run around 5 years and have many contact. The main project is based on Public University in Malaysia and their company is about computer supplier and maintenance. Honestly, I’m interested to invest and I’ve enough money if I want to involved but I need to think. It’s a big risk for me.  I’ve planned at this year to buy a subsale house and if I’m invested at the company, I will hold my plan at least for next year. Will next year the property price will down? I don’t know as this year also the price still not down. That’s the main reason I’m still unsure to invest.

The other reason is ‘Will they success ?’. The industry of computer has belong with big name and it ain’t easy for them to get through it. It make worst when I’ve read on his Facebook profile. Many negative comment has been made about government and politic. Don’t get wrong, I’m not involved in politics but as a businessman, you need to get away from any politic issue especially when your main project is in government project. The politician could do many thing if he heard that you are not his/her voter. That’s the dangerous one if I’m invest in the company.

Even though I’ve a minimum money but I don’t think to take a big risk. Maybe I’ll just invest in Fixed Deposit as it has guarantee that we can’t lose our capital. I’ve been searching the best company could give the best return for my investment. I won’t invest much, maybe RM1,000-RM2,000 to test the result.

Other than that, I’m afraid to fail again. Before this I’ve invest more than RM5,000 in pineapple project but it has failed and I still feel mad to my friends. It ain’t easy to become a friends that could make me lose money. So, I think it is better if I’m continue as his friends not as an investor.

OOO.. I’m also have a dream to make my company as private limited company too. Maybe in 3 years it could growth and after 5 years it could become private limited and I could manage it. At that time I could become an entrepreneur and who knows I could buy another company. Or maybe at that time I could buy more share at my friends company too.. Okay, that’s a dream but it is not impossible.

Do you have any similar experience like this? How you make decision? Let’s share with us..

 

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