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Ask HN: Have to invest 500K in a business – what can I do?

38 points by oldjack ↗ HN
I am a not so successful software entrepreneur. Have tried my hands at a few startups but haven't made it yet.

I am planning to file for US green card using the $500K investment EB5 visa. The KEY requirements for EB-5 direct investment visa are that: - one invests $500K in a existing or new business - generate and sustain 10 NEW full time jobs for 2 years. this is key! - located in a TEA ( targeted employment area) - should have active role in management of the business (at least on paper!)

I don't want to invest in my own company because - 1. 500K would be insufficient to sustain 10 jobs as tech salaries are too high. 2. 500K is all i have, and with my track record so far, can't risk the startup failing and loosing both my investment and consequently the green card.

So any advise on safe business ideas or startups that one can invest in considering the above requirements!

46 comments

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alaskamiller
Quick Service Restaurant. Specifically a boba tea shop. This is how it's done here in California.
oldjack
Seeing first hand how much boba my kids have, this sounds like a good option ;)
sokoloff
I’m no expert in the area but if I wanted something that was lower variance/expense than a software startup and that might be doable on just $500K, I’d do research on something like a pizza joint, a diner, or maybe a franchise food service place. (Looks like Subway is one of the cheaper franchise food service places to open.)

In this case, I’m assuming your real prize is the green card, not the actual business, as I’d way rather have $500K of VOO or VTSAX than 2 Subway franchises.

rdtwo
I think if you could park it, earn zero interest and get your 500k back without a lot of assache that would already be a win. Even if you only got 300-400 back but had to do nothing but work your other tech job it would be a good trade.
taxcoder
This was my first thought as well. I'm not sure, though, that one Subway would support 10 full time employees. An assistant manager could handle most of the day to day operations, with the OP overseeing.
jbjbjbjb
I think OP could do a few Subways with $500k
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GoldenMonkey
Can you qualify for a loan? SBA loans require 25% down. 7 year payment plan.

That can get you a $2M business. Preferably tech related since you have experience in it.

Otherwise, start a tech software consulting business. $500K is plenty to bootstrap, hire a few key employees, biz development… to land some key clients…

chermi
Tagging so I can read about EB5 and come back later. But at first glance, and with my limited experience in tech as a founder & VP, 500k sounds far too little for 10 FTE for 2 years.

Edit -- I'm sure you've looked into it more than I have, but according to the link below, I'm seeing minimum amount for TEA of 900k if filed after Nov 2019?

https://www.uscis.gov/working-in-the-united-states/permanent...

GreeneNC
I worked for a company getting EB-5 investors and had to run multiple financial models for potential businesses as a MBA Grad Student. 100% a restaurant will get the most bang for your buck (job wise). I know what a TEA is and how we obtained those to cover what we were working with. Contact me @ raouldukenc@gmail.com and we can work something out.
rdtwo
I agree that you will get high jobs per dollar in restaurants but is that really the optimal approach? Restaurant are pretty risky right now as a business segment and you don’t really need to exceed the 10 job requirements. As a cookie cutter EB-5 Mill it makes sense as it’s easy to scale but it does not seem optimal for a one off.
GreeneNC
Should have also mentioned what Region/Area/City you wanted to move to… that matters
rdtwo
Gas station or self storage. It’s basically a land squat. A chain of coffee shacks would be viable too. Reselling shoes is viable but not good for getting more laborers. A child care or tutoring facility would be a good choice too. But lots of work. Otherwise maybe eth mining would be profitable even on gpu in a year. Ideally you would buy some equipment that’s easy to move and retains value then sell it off after 2 years with minimal losses.
oldjack
Hard to employ 10 people in gas station or self storage or etc mining!
rdtwo
At a gas station that’s 24-7 you need 4.2 staff to cover all shifts. If you double up you are basically there.
xupybd
Lawnmowers in the suburbs. You will have to sink a lot into advertising. But if you have to hire 10 staff you can get them dropping flyers right away.

Getting geographically close customers is key to making it viable.

You don't need to pay high wages, the training is minimal , and managing it is straight forward.

It's not going to make loads of money but you should be able to get profitable quickly.

What ever you do 500k for 10 staff is scary.

rdtwo
Yeah 500k basically pays wages for a year to 10staff and leaves Maybe 100k leftover at best. It will be a full time job managing and organizing the workers for minimal profit. You also won’t get good workers unless you recruit from your church or something. I’m not sure how you run the business and do your day job on the side. You basically have to have your spouse run it and even then idk how you both stay sane.
c_o_n_v_e_x
Out of curiosity, what is your driver for going to the US? Depending where you go, you can go a lot further on $500k USD overseas than being stateside.

A green card opens you up to US tax liability on all of your investments globally.

db1234
Irrespective of green card, if you are an US resident according to substantial presence test then you owe taxes to IRS on global income.
oldjack
I am already in US on a work visa and kids are kind of settled in here!
rdtwo
Thinking about this some more I think your best bet is to start a medical practice with someone. Dentist, physical therapy, psychology, birthing center. Anywhere where you can provide a bunch of folks that are essentially self employed or can be self employed overhead services so they don’t have to deal with it. In many of these the fields are protected from non licensed folks being the main owner so you need to be a 49% partner and have a good contract setup.

You could do it in the trades but it’s harder to get reliable folks and steady work.

halpert
What would the ten employees do? Medical staff can be pretty expensive.
tasogare
Idea from Japan: having 4 secretaries for a single MD.
rdtwo
No too expensive. 1 for 10. Keeping overhead low is key to profit. A tech person to integrate all the billing/phone/computing systems would be a good fit as well.
simfree
Handle billable work, ideally making a profit. There are quite a few new dentists graduating every year, $500k could buy an office in a decent location, plus another $100k to $300k to build out the space and gain momentum.

Figure 2 to 4 receptionists, 3 or 4 dental hygienists, the doctor themselves, OP, and whoever else they hire, and you can likely hit 10 employees.

rdtwo
Yep this. There are like 6 hygienists or more per dentist.
rdtwo
So you have say 1-2 phd level providers 4 masters 2-3 technicians 1-2 trainees and 1-2 billing and schedule people.

Each provider should be able to generate at lest income to cover 130-140% of their salary and the extra 30-40% goes to overhead and support staff salaries.

ipaddr
Setup a youtube troope and create content.
GVRV
Aren't there consulting firms that cater to this very need? The informal discussions I've heard around EB5 visa in India are that these firms group multiple such individuals and then start/run a business for this group (something like a medical practice clinic or a hospitality franchise) until they qualify for the green card, for a fee of course.
oldjack
Yes indeed there are consulting firms and websites listing EB5 investment projects. I turned to hacker news community because this is a place one can get some out of the box ideas :)
fortysixdegrees
Get a B1B2 visa, move (kinda) to the US, socialise, then the answer will present its self.

Source: been there, ish.

khalidx
A good place to be right now is in the logistics industry - a necessity that isn’t going away any time soon. And with the current logistics supply shortage in the USA (specifically for trucking companies) it won’t be hard to compete and start delivering shipments.

With 500K you can afford to buy several freight trucks. All you would need is 3-5 trucks to start turning over real profit. The rest of the employees can be dispatchers. The trick here is finding drivers as they are in high demand. Dispatchers are easily trained.

I’ve bootstrapped a similar logistics business with less than $10,000 USD and had good success within the first 60 days. Licenses and certifications can be done in 2-3 days and is a fast way to have a business fully certified and up and running.

knonothing
Great suggestion. I've been looking for a way to break into logistics/ltl freight. How did you deploy your first $10k?
khalidx
Spent the money doing three things:

- building an application to assist with dispatching. Dispatching in the current state of the world is a human heavy process with a lot of phone calls. The application was built to make it easy to pick the correct shipment opportunities.

- paying for fuel and hotel stays. Fuel (other than labor, the drivers) will be your largest cost by far. Also, hotels for drivers that aren’t driving sleeper trucks (trucks with a built in sleeping cabin). This happened rarely but did occur when we took shipments late in the week. For the uninformed: never pick up a shipment on Friday, as it will likely extend over the weekend and your truck will stay full over that period.

- paying for trucks. Whether you rent or buy, the trucks have to be paid for. If you are brokering shipments only (as a broker vs as a carrier) this won’t be a cost

knonothing
>Dispatching in the current state of the world is a human heavy process with a lot of phone calls. The application was built to make it easy to pick the correct shipment opportunities.

Can attest to the first part of this statement. What went into your decision making process in selecting the right opportunities? Focusing on a specific geography/lane? Type of cargo?

khalidx
Lots of stuff :)

Simply: achieving the highest profit margin for LTL loads across a range of factors + route optimization.

knonothing
Appreciate your candor and wishing you success with your business! What do you think of this approach: I was thinking of starting off as an independent broker (I have a niche customer base I can serve) and using load boards to book independent truckers. Over time as I gain traction, add a customer facing layer for booking/tracking and retain full-time drivers.
iAm25626
My understanding is that EB5 program are currently in limbo. First step is to find a good lawyer. Good luck.

https://www.uscis.gov/working-in-the-united-states/permanent...

"Alert: As of Dec. 30, 2021, Congress has not enacted new legislation authorizing the EB-5 Immigrant Investor Regional Center Program. As a result, USCIS is reevaluating the decision to hold, or not act on, any pending petition or application of these form types that is dependent on the expired statutory authority and was filed before the end of the statutory authorization. We will provide additional guidance as soon as practical."

oldjack
EB-5 visa has two investment options EB5 - Direct and EB5 - regional center. The regional center program is in limbo. The EB5 direct is permanently authorized and still running. The key difference between the two is that in regional center you are more of an investor, vs Direct where you should have a management or policy formulation role in the enterprise.
iAm25626
Got it. I stand corrected. Thank you for the clarification. Best of luck. Liquor store seems to be recession proof.
Irongirl1
I would say a messenger service. One dispatcher, 9 bikers. In an urban area, I bet you clean up and we have very few messenger businesses here. It's in the logistics area, but more specialized...so you would focus (ie: advertise) deliver of things like prescriptions etc. Drones haven't really taken off in this space and FEDEX and UPS are having issues around theft of medications.