Would this work... (inspired by ponzi)?

Question

Ponzi Schemes are defined as fraudulent, and paying others from other investors money.

What if there was a way to pay investors from actual revenue from a product, and earn more money by charging a fee for withdrawing the money. The fee also goes into paying members. Have a fixed investment maximum so as not to have too high an investor, and a variable payment rate, low enough to sustain, but higher than putting it in a bank.

Profits can come from services, or products sold. Advertising on the site could also count as revenue.

Wouldn't you like to get 0.5% daily back from your investments? APY would be more than the bank, but achievable by the revenue from the products....

Can anyone tell me flaws they see with this plan?

Answer 1

I need to have more information about how the investor earns his money. You said that the revenue would come from a product. I'm not sure what this means.

It would be illegal if, for example, you (1) used investor money to buy an inventory of products, (2) pocketed the money from that sale, (3) used additional investor money to pay off the first investors, (4) and continued to divert funds to yourself, while paying off earlier investors with the funds acquired from later investors.

To see if this is a fraudulent "ponzi" scheme, I would need more information about how the revenue is generated and how investors were paid.