Success Happy

When rich and successful investors buy things that are profitable, how profitable? And how long for the profit?

When rich and successful investors pay millions for something that is profitable, how small minimum of a profit would they agree to no less than? 100%/200%/300% or more? Since although that would be only a few times what they paid for, the amount is still great. And another question: With inventions, since the profit is a gradual process, how long of a time that even if they had to wait to gain the profit would they still agree to the deal? 10 years or less? Since it depends on the amount of money in profit, give me some examples. I would understand that a 10 year wait for a 100% profit of 5 million dollars is better than a 10 year wait for a 100% profit of 1 million dollars. But I don't know the range. Just the obvious and the basics.

Public Comments

1. Its not usually that simple. In the first place "inventions" is not how most wealth is created in the free world. In the second, profit margins are a complex mix of things -- most of the time this actual "invention" is a small part of the cost of what is actually made. In the real world it would be more like this: (1) $1 million = Cost of invention, paid to inventors. (2) $10 million = cost of development, getting the the product made and ready for the marketplace (3) $20 million = Marketing & advertising, getting the target audience ready to buy the product (4) $5 million = Manufacturing costs, costs of "stuff" used to make the product (5) $5 million = overhead, running the business that develops, manufactures and markets the product ==================== $41 million = Total cost of bringing the invention to market as a product $85 million = Selling price times units sold = 100% mark up for sale ======================= $44 million = gross profit to buying company ($18 million) = less taxes ($10 million) = less SGA (the cost of running the entire company, not just the part that brings this invention to market ============================== $16 million = net profit to company