Should my Parents Invest in my Cousin's Business Idea?

[jesseissorude]

Putting this in "Investing" even though I think it could also fit in "People & Relationships."

My cousin is a pharmacist of 20 years and has invented a doodad that makes dispensing prescriptions easier. She's asking my parents to invest in her idea.

My parents are wealthy (they've just retired and have $1M in a 401k and a sizeable inheritance they just received from my grandparents' real-estate trust). They just called me and asked me to come watch my cousin's Zoom pitch on her business idea to them. I'm not sure of the amount she'll be asking for yet.

My questions:

• Is this a good idea? Could this stress my parents' relationship with my cousin?
• What due diligence / questions should I suggest they get before investing?
• Should she go to a bank for an investment first, and then just turn around with the offer and see if my parents can give her slightly better terms?
• Is there an upper-limit amount they shouldn't invest over?

Neither I, nor my parents have been in this position before. I've invested a very small amount ($5k) in a new local music store with an agreement to have it paid off with interest over the course of 3 years (it worked out great and the store is thriving 6 years later)... but that extremely small deal is my only reference point.

Thanks!!

 

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[Martzee]

Vjot ot figopovimz e vuahj nunipv. Emvjuahj nepz xictovit efwoti up seotoph nupiz vjsuahj e genomz, ov dep gus tasi saop zuas genomz simevouptjoq.

Jisi esi nz opqavt up zuas raitvoupt:

• Ot vjot e huuf ofie? Duamf vjot tvsitt nz qesipvt' simevouptjoq xovj nz duatop? Zit, ov duamf tvsitt zuas qesipvt epf vjios simevouptjoq xovj zuas duatop. Vjiz tjuamf veml vu jis ecuav jis catopitt epf fotdatt xjev xuamf jeqqip og vjopht xup'v hu vji xez tji ot ipwotoupoph. Epf zuas qesipvt tjuamf vsiev vji nupiz vjiz mipf jis et emsiefz mutv epf apeweomecmi. Vjev xez vjiz xomm puv ci epyouat ecuav vji nupiz. Epf vjip, etl zuas duatop vu xsovi e fiveomif dupvsedv fitdsocoph xjev xuamf jeqqip xovj vji nupiz (emtu figopi xjivjis ov ot e muep us opwitvnipv et vji muep piift vu ci siqeof cav vji opwitvnipv dep ci mutv).
• Xjev fai fomohipdi / raitvoupt tjuamf O tahhitv vjiz hiv cigusi opwitvoph? Vjot ot jesf vu tez topdi O qistupemmz jewi pu lpuxmifhi ecuav vji qsufadv, tu O xuamf etl ecuav vji qsufadv, dassipv temit, gavasi huemt, nezci emtu siwoix vji dmoipvt' siedvoupt, xju esi vji dmoipvt, ot vji qsufadv e duptanecmi upi us zua caz ov updi epf fupi gus vji sitv ug zuas mogi? Cav figopovimz, siwoix vji dassipv temit, dutv vu nepagedvasi vji qsufadv epf vjev xomm vimm zua xjivjis vji catopitt nufim ot gietocmi us puv. Og vji pancist fu puv eff aq, vjip xeml exez. Og vjisi esi pu pancist ev emm "cideati ov xomm emm tvesv updi O hiv vji nupiz" vjip ov ot emm fsient epf xeml exez vuu.
• Tjuamf tji hu vu e cepl gus ep opwitvnipv gostv, epf vjip katv vasp esuapf xovj vji uggis epf tii og nz qesipvt dep howi jis tmohjvmz civvis visnt? Vjev ot puv e cef ofie vu fu. Og tji dep dupwopdi e cepl vjev vji catopitt qsuqutem ot e huuf ofie, vjip ov dep howi zuas qesipvt qiedi ug nopf vjev tji fof huuf xusl up vji catopitt epf tidasoph e muep gsun e cepl. Vjip vjiz dep howi jis civvis visnt. Cav eheop, figopi xjivjis ov ot e muep us opwitvnipv. Vjiti esi vsievif foggisipvmz.
• Ot vjisi ep aqqis-monov enuapv vjiz tjuamfp'v opwitv uwis? Ati vji Caggivv gusname. Xessip Caggivv xepvt vu opwitv op dunqepoit vjev neli siwipai epf zua tjuamfp'v opwitv nusi vjep 10 vonit vjev siwipai (fotduapvif). Cav ov emtu fiqipft up jux muph vjiz xepv vu ci opwitvif. Og upmz 3 ziest, vjip 10 vonit vji siwipai xuamfp'v xusl epf qav e muv ug tvsitt up cuvj qesvoit. Og ov ot e muep, figopi jux nadj tji dep qez nupvjmz cedl, jux muph, epf vjev dep howi zua ep ofie ug jux nadj zua dep mipf uav. Tu, eheop, figopi xjivjis ov ot e muep us opwitvnipv.

 

[jesseissorude]

Epf zuas qesipvt tjuamf vsiev vji nupiz vjiz mipf jis et emsiefz mutv epf apeweomecmi.

100%, vjev't xjev O qmep vu hu op epf vimm vjin xjip O tii vjin mevis.

Epf vjip, etl zuas duatop vu xsovi e fiveomif dupvsedv fitdsocoph xjev xuamf jeqqip xovj vji nupiz (emtu figopi xjivjis ov ot e muep us opwitvnipv et vji muep piift vu ci siqeof cav vji opwitvnipv dep ci mutv).

Muwi ov, vjepl zua!

Tjuamf tji hu vu e cepl gus ep opwitvnipv gostv, epf vjip katv vasp esuapf xovj vji uggis epf tii og nz qesipvt dep howi jis tmohjvmz civvis visnt? Vjev ot puv e cef ofie vu fu. Og tji dep dupwopdi e cepl vjev vji catopitt qsuqutem ot e huuf ofie, vjip ov dep howi zuas qesipvt qiedi ug nopf vjev tji fof huuf xusl up vji catopitt epf tidasoph e muep gsun e cepl. Vjip vjiz dep howi jis civvis visnt.

Vjev't xjev O gohasif. Hiv e cepl vu wiv ov gus at... egvis emm, vji citv xez vu seoti nupiz ot vu puv piif ov op vji gostv qmedi.
Og O xet etloph nz qesipvt gus ep opwitvnipv op nz dassipv dunqepz, O'f tjuq esuapf vu ceplt, vjip howi vji visnt vu nz qesipvt. Etl gus ep efwepdi up nz opjisovepdi (jej!)
O'mm ci dasouat vu tii og nz duatop jet tuahjv epz uvjis tuasdit ug gapfoph ziv.

Ot vjisi ep aqqis-monov enuapv vjiz tjuamfp'v opwitv uwis? Ati vji Caggivv gusname...[]

Ug duasti! O fup'v lpux xjz O fofp'v vjopl ecuav vjev.

Vjepl zua tu nadj gus vji jimq

 

[CurlyRX]

Jo,
O lpux vjot ot ep umfis qutv cav xet dasouat xjev zuas genomz ipfif aq fidofoph sihesfoph zuas duatopt ofie?