Keeping W2, but have cash on hand...best options?

searcher profile

September 29, 2024

by a searcher from Texas A&M University in San Antonio, TX, USA

I suspended a self funded search 2 years ago to take a flyer joining a seed-stage start up. Things are going exceptionally well and very likely we're "going to make it". This is the greatest professional challenge of my career so fa, I love the work and the people, and financially, it is very much in my best interest to stick around.

That said, I was already hoarding liquid assets for my search and further liquidating more since then. So I have cash to deploy and keeping it invested in the public markets doesn't excite me.

So, I'd like to discuss the options I have available

- Solo buyer. As an absentee, SBA may be difficult. What advice might anyone have on loan options in this case. Assuming a well established business with management and key operator in place.

- Partner with another searcher, who will be the operator. What are the SBA loan qualification standards in this case, where one partner is absentee and another is active? Or are other non-SBA loans a more attractive option?

- Invest smaller checks in other multiple search funds. I need to better learn the economics of this. Both positive and negative feelings about the level of involvement here.

Of course, the other options are to either invest in real estate or simple keep it liquid in the public markets, but as it is with most of you here, this is more meaningful.

Would love to hear some thoughts or stories others may have had in a similar position.

Thank You.

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commentor profile
Reply by a searcher
in Reno, NV, USA
Find a company that has a good 2IC that for some reason can't/won't buy the business. Depending on the financing, it will be hard to get that person any equity early on, but offer an "earn in" whereby they are awarded some equity in the business (consider performance based) ONCE THE INITIAL FINANCING IS PAID OFF. This is easier said than done, but not impossible. Beware, though, it is much different putting your own money on the line and "earning in". It's always difficult to find someone that will care about your money as much as you do.
commentor profile
Reply by an investor
from University of Oxford in Austin, TX, USA
Congratulations on the startup success! My 2c here would be to invest. Unless you have industry experience that would allow you to do #1 or #2 with extreme efficiency it’s going to be a tough sell for everyone involved (broker, seller, bank, investors if you need them). It sounds like you have some excellent upside at the start up, it’s likely not worth the distraction to add more time commitments to your plate.
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