Shayne Heffernan – Stop Lending Your Money to Friends

<p><strong>BIO: </strong>Shaye Heffernan has a Ph.D. in Economics and has done several IPOs that have surpassed a market cap of a billion dollars.</p><p><strong>STORY:</strong> Shayne lent his friend of 20 years $6 million in the agreement that he’d get a stake in his friend’s business. That business failed, so Shayne never got his money back nor made anything from the friend’s company.</p><p><strong>LEARNING:</strong> Lending money to friends is a terrible idea. Have very clear agreements when lending money.</p><p>&nbsp;</p><blockquote class="ql-align-center"><strong>“Keep your friends as friends and your business as a business. Don’t try to mix those up.”</strong></blockquote><blockquote class="ql-align-center">Shayne Heffernan</blockquote><p>&nbsp;</p><h2>Guest profile</h2><p><a href="https://www.linkedin.com/in/shayneh/" rel="noopener noreferrer" target="_blank"><strong>Shaye Heffernan</strong></a> has a Ph.D. in Economics and has done several IPOs that have surpassed a market cap of a billion dollars.</p><h2>Worst investment ever</h2><p>Shayne’s friend of 20 years came to him in Hong Kong in tears wanting $6 million to save his business. The friend was also being thrown out of his house within the next 48 hours. Shayne felt sorry for his friend, so he lent him $6 million. The agreement was that he’d get his money back and some returns once the friend rebuilt his business.</p><p>Shayne didn’t do any due diligence, and the agreement was written quickly without thought. He just transferred the money to his friend immediately.</p><p>Shayne’s friend built his next venture, which got listed and went through the roof. Shayne was celebrating as the company had a valuation of about $10 billion. So his friend’s stake was worth about $6 billion. Shayne thought he would be rich! He called his friend to follow up on the agreement. His friend said that this was a second venture, the first one (which he insisted was the one they agreed on) had failed. So Shayne didn’t get his $6 million back or make any money from his frie