The concept of investing directly in a company is not as commonly done compared to simply buying stocks. Finding private investment opportunities to make money is a great way to unlock additional income. There is more risk involved, but the opportunities allow you to gain above-market returns and influence the business direction. Investing in a company can be a fantastic way to build wealth. But before you do that, make sure you have a concrete process. Professional investors need playbooks to replicate their success and learn from their mistakes. If you don‘t already have your own process, here is Sharrans’s 4-step process for investing in a company. It‘s pretty simple, but it works!
Enhance your investing skills by listening to related episodes below:
“We don’t look at contracts as a way to enforce something.
We look at contracts as a way to memorialize our agreement.”
– Sharran Srivatsaa
00:00 Why do you need a playbook
01:39 Mistakes can be costly if you don’t have a playbook
02:22 Sharran’s framework is an excellent guide if you’re considering investing in a business
03:32 Discover the origin of Sharran’s FOUR GOODS process
04:36 Good people – referrals are not enough; working relationship and history are necessary to get to know people
09:37 Good intentions – is this person friendly, helpful, and collaborative?
12:55 The two kinds of people – the person in the middle is a very dangerous person
16:46 Good rationale – the deal has to work on a simple spreadsheet; No spreadsheet, No deal!
19:16 Good contract (a Memorandum of Understanding can also work) – don’t proceed with the contract without good people, good intentions, and good rationale