How long until I see a return?
The amount of time it takes to see a return is highly dependent on the type of investment contract.
- Debt. A simple loan will define the number of months until it is paid back. For a revenue share, it depends on their projections for future revenue. The faster the business makes money, the faster you will see a return.
- Convertibles & Stock with No Dividends. You are waiting until the company goes public or is acquired. This can take a very long time. It took the early investors in Harmonix (the creators of Guitar Hero) over 10 years to earn a return.
- Stock with Dividends. This depends on the specific investment agreement. Typically, dividends are a percentage of profits. Therefore, the amount of time to see a return depends on how profitable the business is.