"We don't have to save the world. The world is big enough to look after itself. What we have to be concerned about is whether or not the world we live in will be capable of sustaining us in it." -Douglas Adams
How about the little pitfall of not knowing what the hell you are doing?
Why not open a public Aquarium or a gourmet resturaunt? I would imagine you know as much about running, marketing, business management, employee relations, etc in those types of businesses as you do about running an auction house.
Or if you really want to improve your chances of getting a return on the investment, take the money and buy lottery tickets, the odds would be better.
Well, I would be backed by someone who has been in the business for twenty years, and has owned resturaunts, and owns 5 apartment complexes.
All auction houses where I plan on setting up are backed 3 months, and if you knew much about auction houses, you'd know whenever a knew one opens, it not only is featured in the newspaper (of a town with over a million residents) but is swarmed. I have people who will seed the items to sell for the first month, until my house is considered reliable. People there don't want to wait three months, they want money quickly.
With a 10% buyer premium, and a 20% seller, that's 30% of all sales.
No offense, but if someone is willing to back you for a business like this, why the hell do they need you in the first place. What do you bring to the equation? They could hire someone to do what you'd be gettin a partner's share for, especially at your age. If you had said you were gonna go work at this guy's auction house until such time as you knew it well enough to open one of your own, I'd say that was a helluva idea. The only auction house I've had much dealings with was crooked and changed ownership three or four times in the last decade. But that was a livestock sale barn.
Go for it. Get a lawyer. Don't sign anything without his approval. Don't get the lawyer on yer partner's referral.
You do understand that if you really do get into this and you have someone (who apparently doesn't really need you to open and run an auction house) and you actually have a pivotal role in the running of this venture that you are making a very major commitment. This isn't something where you can decide in six months that it isn't as fun as you thought it would be and waltz out the door blowing goodbye kisses.
You are aware of the fact that starting a business is one horrendously arduous task. Long hours, lots of shitty work that you absolutely need to do yourself, 24/7 focus on the business, on and on ad infinitum.
Be exuberant as you want but keep in mind that the odds of making it are not all that good. It doesn't matter what "edge" you may think you have, every new biz thinks it has an "edge". more fail than succeed.
The ones that make it take tremendous effort and commitment.
You better have something in writing if you are a partner in this business. You have nothing to offer this deal but your sweat and that isn't very tangible. That could leave you in a rather in a rather tenuous position if your efforts held turn this venture into a successful business and you are a handshake partner. A good partnership is 2 things (among others)
1. It is only as good as the paper it is written on.
2. It is on average, like a bad marraige. Bitching, sullen acceptance and no sex. You stay together for the sake of the business. If your partner was your friend, it can turn the friendship into a single facet, the business, the friendship becomes subordinate.
But I digress...