property and business investment

Freckles advice is great!

Ivan,

I only have 2 points to make:

• Your friends may very well become incredibly successful in this brewery. But that is NO GUARANTEE that you can make money from it.
• You are using phrases like "not fair", "being taken advantage of,"  "beyond hope" etc. This isn't investment language.

Before you can do anything you need a comprehensive business plan. That will describe how, when, how much. time to break even, market assumptions and so on. They're coming to you so they produce that. Along with comes an investment proposal; value of the business and how they've valued it, why X dollars buys X equity, other financing requirements, are there or will there be further equity sales to raise capital, does your equity dilute and by how much if any, etc etc. You have to cover all these basis before any serious negotiation can start.

They should expect you to want a better deal. You don't start to haggle until your close to agreeing on price, value, business plan/model etc. The next stage is where you start to shape the deal to where everyone is close to comfortable and you think the deal has merit. Final negotiating stage is where the hard head comes in and you agree on a price.

You never commit until the end and only subject to a lawyers and accountants appraisal. They find anything wrong it's back to the table.

Once you agree on a deal there must be protections and guarantees from all parties that everything material to the deal has been disclosed. 

There must be rules of engagement when any parties other businesses do business with this one. IE this business cannot provide loans, credit etc without board approval and there should be limits. these can be included in Company Rules or a constitution. Your lawyer should fully inform you of this. This is the company playbook and defines what the company can do and what its officeholders may authorise etc.

Make sure you have a legally binding exit clause with a planned extraction if your not happy say 12 months down the track

The deal side should be fair and equitable. Advantage to anyone side is something to be avoided because an unbalanced deal has a higher probability of ending acrimoniously. So when you run into what you think is inequality make this statement and indicate your objective is to see everyone get what they want. A happy deal tends to be a long successful deal.

A good start. It seems they're taking you more seriously. Something you always need to keep in mind is the more competent you appear in a negotiation the more likely you are to get concessions. You always need to negotiate from a position of confidence and knowledge. If you can't think of an answer during a negotiation you always just say, "I'll give this more consideration before giving a firm answer".

In a negotiation have a list of bullet points you want to discuss or get clarification on. Note down responses. These can be referred to in future talks. 

Note new subjects for future research/consultation.

By coming prepared, writing things down, making recommendations etc you start to build a platform of confidence, project an image of competence and someone to be taken seriously. You also show you are giving the offer a serious hearing and think it may have merit. That gives them the incentive to work harder at structuring a professional deal and according you a greater level of business respect.

If you eventually agree to a deal your future relationship will be much more professional and equal. That will have a bearing on how the business is managed as a multi owner operation. 

A token business plan is not something you can base a deal on. Professionals do not put money into something airy fairy. Where you see gaps they have to be completely filled in. This kind of thing goes to their own business ability as well. You can get away with poor business planning when you are the sole owner but absolutely not in multi party deals. Everyone must understand the business, its goals and objectives and how its going to get their.

You should negotiate even if it's only for the experience. At the very least this exercise will leave you a much smarter cookie. Regardless of how things go try and take it to its natural conclusion and in a way everyone can walk away relatively happy regardless of whether you buy in or not. You can also leave the door open for a future deal if you don't commit completely or at all this time.

Happy to help. Drop me a line if you need any more info.

Welcome Zac –  there's plenty to read  on this site.