Hi, I’m a freelance software developer. My friend had an LLC and wanted me to join him for a project to revamp his online store.
I invested 5k and entered only a profit-sharing scheme. I worked on top of it, being in charge of the project. If successful, the profit shares would have been a great return. Big IF but I knew the risks.
However, soon after starting I noticed that my friend had exaggerated his financials and had no plan as to what he wanted to achieve. Also, I had to incur extra costs like shopify themes and other tools that he said he would reimburse me for but made a lot of excuses to not pay them back.
Fast forward to a couple weeks after we started, he’s shutting down his LLC. I told him we should re-do the contract since I signed with his LLC if the project should continue. He’s gaslighting me into doubting him and telling me to just trust him and not worry about it. Obviously I’m not stupid and I’m catching onto his conman traits such as talking big and always mentioning his big past successes and the high profile people he knows.
Basically he has no intentions to re-do the contract and firm on not returning my money. He constantly reminds me “if you quit the investment is lost” (actual clause in the contract). No clause about what happens if the LLC disappears. What are my rights? 5% of me says I’m misreading the situation but my gut instinct is so strong on this one. I think I would sue and just lose this friend.
Sueing is going to cost a lot more than 5k. He sounds like he’s full of nonsense though, there’s lots of people in business like that. Lots of pretenders that are basically just acting as middlemen while doing nothing. If it has cost you 5k to learn that experience, I would say that’s pretty cheap. I’ve dealt with these kind of people many many times and it has sadly cost me a lot more than 5k and a lot more time as well. I think you’re gonna have to brush it off as a learning experience.
If you get in a situation like that again, I would recommend not going faster than any of your partners, if they tend to slow down then just shift gears and pivot to other potential side businesses. The more eggs in your basket the better