All Financial Wisdom
Investing into Rich Kids
Have you seen the venture capital investing reality TV show "Shark Tank"?
Well, Barbara Corcoran choose to not invest into a pair of brothers pitching their entrepreneurial business, Reviver, during the most recent episode. She states:
"The best way to think of a solution in business when you're slammed up against a wall is to try to think of five different solutions to get around it and keep going, but when you know that you have a trust fund, you know that you can always fall back on your parents, and you know that you can get additional funds, you get cheated out of thinking of those spur-of-the-moment, very needy ideas that get you through. (Business Insider)"
I completely agree with Barbara here. Their business can just scrape by for years without any recourse or pass up other business oportunities because they aren't in need of the profits at this point. As an investor, that is really scary. To a point, a business shouldn't get all the profit it can get, but be able to do it responsibly. These two brothers might be able to do that, but since Barbara has other opportunities ahead of her, her money is probably better spent elsewhere.
If the brothers needed funding, their family is a great starting place. If they can't trust you with their money, than other investors shouldn't trust you either. Now, if the brothers needed expertise and business connections, that's where networking, hard work, and maybe employing some business advisers would come in handy.